The document discusses three EU directives that will fundamentally change the international tax environment: 1) the Directive on Administrative Cooperation in taxation will increase exchange of information between countries; 2) the 4th Anti-Money Laundering Directive strengthens regulations around beneficial ownership and increases transparency; 3) the Directive on Mandatory Disclosure of aggressive tax planning will require disclosure of potentially abusive tax schemes.

1. Transparency and Exchange of Information.
1
International Tax Advice.
Tax Compliance.
Indirect Tax Services.
Christos A. Theophilou

2. Agenda
1
• Directive on Administrative Cooperation
(DAC) in the Field of Taxation
2
• 4th Anti-Money Laundering (AML)
Directive
3
• Directive on Mandatory Disclosure of
Aggressive tax planning schemes
2Christos A. Theophilou
Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

3. Agenda
1
• Directive on Administrative Cooperation
(DAC) in the Field of Taxation
2
• 4th Anti-Money Laundering (AML)
Directive
3
• Directive on Mandatory Disclosure of
Aggressive tax planning schemes
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

4. Directive on Administrative Cooperation (DAC) in the
Field of Taxation
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

5. DAC 5 and DAC 6
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments
2016/2258/DAC5
Applies: 01.2018
Access of the tax authorities
to the AML information:
Information on the beneficial
owners held by the central
registers and the AML
obliged persons.
Control over the AML obliged
DAC 6
To be applied: 07.2020
Mandatory disclosure and
exchange of potentially
aggressive tax planning
schemes by:
Tax consultants and
intermediaries
Taxpayers
List of hallmarks

6. Agenda
1
• Directive on Administrative Cooperation
(DAC) in the Field of Taxation
2
• 4th Anti-Money Laundering (AML)
Directive
3
• Directive on Mandatory Disclosure of
Aggressive tax planning schemes
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

7. Purpose and Enter into Force
Fight tax evasion, money laundering and terrorist
financing.
Deadline of 26 June 2017 to transform the 4th AML
Directive into national law.
Enter into force: vary among EU Member State
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

8. Personal scope
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Fundamental changes in the international tax environment and their impact on
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Credit and financial institutions
Professionals: auditors, external
accountants, tax advisors, trust or
company service providers
Other persons trading in goods to
the extent that payments are made
or received in cash in an amount of
EUR 10 000 or more
Providers of gambling
services/estate agents/ notaries
and other independent legal
professionals
4th AML Directive

9. Key Changes of the 4th AMLD from 3rd AML Directive
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments
Beneficial owner register
Risk based approach
Politically Exposed
Persons (PEPs)
Cash Payments
10.00
Gambling
Penalties
Tax crime as a
form of Money
Laundering

10. Important Definitions
Beneficial owner is beneficial owner is an individual or legal entity
which ultimately owns or controls more than 25% of a company’s
shares or voting rights or exercises control over the management
of the company.
In respect of corporate entities, the definition of the ultimate
beneficial owner is further specified as “a natural person who
ultimately holds a shareholding, controlling interest or ownership
interest over 25% of the shares or the voting rights in a corporate
entity.”
Member States are free to include a lower %, for instance
Denmark 5%.
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Fundamental changes in the international tax environment and their impact on
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11. Beneficial Ownership Register
As a minimum must include the following
information:
Name
Nationality
Country of residence
Month and year of birth
Nature of control
Size of interest.
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

12. Access to the relevant information
Relevant competent authorities,
Financial intelligence units; and
Any person or organisation who can demonstrate a
‘legitimate interest
Optional for EU Member States to make the
beneficial ownership register publicly available.
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Fundamental changes in the international tax environment and their impact on
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13. Global Initiatives
OECD Global Forum on Transparency and Exchange of
Information for Tax Purposes (150 members)
Brazil
Singapore
Hong Kong
Cayman Islands
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Fundamental changes in the international tax environment and their impact on
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14. Agenda
1
• Directive on Administrative Cooperation
(DAC) in the Field of Taxation
2
• 4th Anti-Money Laundering (AML)
Directive
3
• Directive on Mandatory Disclosure of
Aggressive tax planning schemes
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

15. Scope & Enter Into Force
Once in force, tax intermediaries (under certain
circumstances their clients) who provide their clients
with complex cross-border financial schemes that could
help avoid tax will be obliged to report these structures
to their tax authorities. In turn, EU Member States will
exchange this information with each other, further
increasing scrutiny around the activities of tax planners
and advisers.
Enter into force 01st July 2020 and the first exchange
will take place 31st October 2010
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16. Global Trend
ECOFIN invited “the Commission to consider legislative
initiatives on Mandatory Disclosure Rules inspired by BEPS
Action 12 of the OECD project in order to introduce more
effective disincentives for intermediaries who assist in tax
evasion or avoidance schemes.
Similar to the UK disclosure of tax avoidance schemes
(DOTAS) introduced in 2004. (estimate 12 bn GBP in the
first 5 years)
Ireland and Portugal also have disclosure rules
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Fundamental changes in the international tax environment and their impact on
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17. PURPOSE
The aim is to increase transparency and access to the right
information at an early stage. Tax authorities will be able to
react to close down loopholes and prevent a loss of tax
revenue.
The ultimate objective is to design a mechanism that will
have a deterrent effect; that is, a mechanism that will
dissuade intermediaries from designing and marketing
such arrangements
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Fundamental changes in the international tax environment and their impact on
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18. Personal Scope: Who must report?
“Intermediaries" means any person that carries the responsibility
vis-à-vis the taxpayer for designing, marketing, organising or
managing the implementation of the tax aspects of a reportable
cross-border arrangement
EU Nexus:
(a) be incorporated in, and/or governed by the laws of, a Member
State;
(b) be resident for tax purposes in a Member State;
(c) be registered with a professional association related to legal,
taxation or consultancy services in at least one Member State;
(d) be based in at least one Member State from where the person
exercises their profession or provides legal, taxation or consultancy
services
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Fundamental changes in the international tax environment and their impact on
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19. Material Scope: What to report
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Fundamental changes in the international tax environment and their impact on
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Generic
hallmark
Specific
Hallmark
(i)Payments to stateless
entities or non-
cooperating
jurisdictions
(ii) Hybrid transactions
Transactions aiming
to circumvent
transparency rules
(CRS)
Certain Transfer
Pricing
arrangements

20. When to report?
Which ever happens first:
Within 30 days of the day of the arrangement is made
available for implementation; or
Is ready for implementation; or
Within 30 days of the day the first step in the arrangement
taken
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Fundamental changes in the international tax environment and their impact on
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21. Concerns: General
Hallmarks need to be clarified further and perhaps include some
exemptions to narrow the range of hallmarks.
Unclear of what is an arrangement?
What constitutes sensible tax planning?
Minimum standards. Thus each EU MS might apply the directive
differently.
Overlap with BEPS action 5 (exchange of rulings ) and APAs.
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Fundamental changes in the international tax environment and their impact on
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22. Concerns: General
Bridge of EU Freedoms and proportionality.
Beach of privacy and confidentiality
Article 8 of the European convention of Human Rights when
assessing the balance between protection of the public
interest and taxpayers rights
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Fundamental changes in the international tax environment and their impact on
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23. Concerns: Who will report? Clients at Risk
Who has the responsibility to report when:
Lead tax adviser is outside the EU;
Lead qualifying intermediary is entitled to legal professional
privilege;
Taxpayer designs his tax position without involving a
particular local tax advisor; Thus only the taxpayer knows
the big picture.
Taxpayer plans his affairs based on previous tax advise?
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Fundamental changes in the international tax environment and their impact on
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24. Concerns: Business Risk
Business need to assess inhouse Tax directors
Need to be prepared to monitor and detect
(establish system) this type of arrangements
Ukrainian Investor wants to invest (inbound
investment) in EU?
What about employee mobility?
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Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

25. Agenda
1
• Directive on Administrative Cooperation
(DAC) in the Field of Taxation
2
• 4th Anti-Money Laundering (AML)
Directive
3
• Directive on Mandatory Disclosure of
Aggressive tax planning schemes
25Christos A. Theophilou
Fundamental changes in the international tax environment and their impact on
Ukrainian individuals, companies and investments

26. Thank you!
26
This presentation has been prepared for general guidance on matters of interest only, and does not constitute professional advice. Do not act upon the information
contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or
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publication or for any decision based on it.
Christos A. Theophilou
Christos A. Theophilou
Partner
Tel: + 357 22 875720
E: ctheophilou@taxatelier.com.cy
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