Companies with EU business to report on their activities from the end of 2020

International companies that own the assets in the European Union will be required to provide data on their transactions and profitable operations at the end of 2020. Such a measure is due to the EU Directive on fighting against companies and consultants who are looking for tax evasion methods.

The adopted EU document will enter into force on November 1, 2020. Starting from June 25, 2018, when the decision was made, companies with businesses in the EU, as well as business owners in its territory, will be required to file reports on their activities. Transactions of international and transnational companies, operations of firms with legal entities all over the world, operations between private individuals and public authorities fall under the supervision.

First of all, this document will deal with transactions with tax benefits. The list of signs of such a transaction is quite large, since these criteria include both purchases from a loss-making company and intermediary’s remuneration transactions with tax benefits. The report should disclose the essence of the transaction, its size, the timing of implementation, the signs on which the company decided that the transaction should be reported, as well as information about contractors, including their tax residence. A month is given for submitting a report after the transaction.

The first country to introduce new measures was Poland. Now the tax authorities receive information about all participants and counterparties who have access to the transaction. The introduced norms in the Polish legislation also tightened checks of persons involved in receiving income from such operations. Also, the list of accountable persons included counterparties and persons engaged in conducting transactions with the presence of tax and financial preferences.

According to experts, throughout 2019 the EU countries will implement the Directive on this issue. Based on the national rules for the regulation of transactions in each country of the European Union, the final adoption of the rules should be completed no later than July 30, 2020, since in August next year the first data transfer to the EU tax authorities will begin. The first exchange of information between the bodies of the European Union and the national tax authorities is scheduled for November 30, 2020.

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