An unexpected consequence of Brexit was the change to the reporting requirements under the International Tax Enforcement (Disclosable Arrangements) Regulations 2020. Reporting of cross-border tax arrangements to HMRC will still be required but only for arrangements which meet hallmark D, being arrangements which have the effect of undermining reporting requirements under agreements for the automatic exchange of information, and arrangements which obscure beneficial ownership or involve the use of offshore entities and structures with no real substance.
Firms with European offices will still need to address reporting obligations there and given the wider European obligations may wish to make a European office the focus of their reporting compliance. If Systems will be required to pick up any work done in European offices on UK matters, as this may trigger a European reporting requirement where none would arise in the UK.
New legislation will be introduced and it is expected to follow the OECD Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures closely.
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