Mandatory Disclosure Rules and Taxpayers’ Rights: Where Do We Stand?

Curtailment of aggressive tax planning (ATP) has become a critical matter for international taxation. Mandatory disclosure rules (MDR) work as an early warning system for ATP strategies. They allow tax authorities to respond quickly to tax risks “through informed risk assessment, audits, or changes to legislation or regulations” while deterring taxpayers and tax advisers from designing, promoting or implementing ATP. MDR have become a significant trend, of which the EU Council Directive 2018/822 (DAC6) represents the most topical development. In light of the above, this study addresses the questions MDR raise regarding their “value rationality” and, therefore, its adequacy for protecting tax advisers’ and taxpayers’ rights. The article warns of the risk of MDR becoming a way of haunting legal tax planning, along with tax advisers and their business, and therefore a threat to the “hard core” of taxpayers’ rights to legal tax planning, legal aid and nemo tenetur, along with severe limitations to the economic freedoms of both taxpayers and tax advisers. The article also discusses the audi alteram partem issues arising from the taxpayers’ lack of involvement in the qualification as ATP of a given scheme, and the siege against the (legal) professional privilege that MDR represent. Finally, the article tackles the severe doubts raised by the sanctions for non-compliance with MDR, regarding legally protected rights, proportionality and culpability, as well as the use of non-monetary penalties and the communicability of evidence obtained through MDR in criminal proceedings.