Greece: Ethics in taxation with the advent of the mandatory disclosure regime

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Greece: Ethics in taxation with the advent of the mandatory disclosure regime

Sponsored by

eygreece.png
MDR forces intermediaries to disclose cross-border arrangements

Riana Zanni of EY Greece discusses how the mandatory disclosure regime will help to combat tax avoidance and why member states must improve their national administrations and systems.

All governments are faced with the increasing challenge of how to manage global taxpayers though their national tax systems. It is a fact that globalisation has resulted in a move away from country-specific operating models toward global business models, which may also be perceived to increase mass-marketed aggressive tax planning.

However, globalisation also provides an opportunity to develop different ways of cooperating between tax authorities, as well as ways to exchange experiences and information on a global scale. 

To secure global tax revenue, the OECD created a set of consensus-based international rules to address BEPS, taking into consideration that taxation is a tripartite environment, where intermediaries are one of the participants – the other two being the revenue bodies and taxpayers. 

‘Intermediaries’ very broadly means ‘tax advisers’, comprising a collective term of accountancy firms, law firms and other tax advisory firms, including boutiques. The term also includes individuals in the firms and corporate tax departments. 

In this context, commissioners of revenue bodies who attended the Forum on Tax Administration (FTA) meeting in Seoul in September 2006, raised their unanimous concern about the role of tax intermediaries in the promotion of ‘unacceptable tax minimisation arrangements’. 

It became apparent that a broader international view had to be adopted. The broader view revealed that the main opportunity for taxpayers to culturally influence the use of aggressive tax planning is the relationship between them and revenue bodies. Nevertheless, the enhancement of such relationship is a long-term process during which risk management remains a priority for the tax authorities. 

The effectiveness of risk management on the other hand, as clearly noted in the OECD’s ‘Mandatory disclosure rules, Action 12 – 2015 Final Report’, depends on current, relevant, and dependable information, such as tax return processing, rulings or audits, may not be able to provide as effectively as a disclosure regime. 

The experience of countries that historically have implemented national disclosure regimes is that these rules have a significant deterrent effect on aggressive tax planning. It was also noted that large corporate taxpayers and high net worth individuals (HNWIs) have the means and access to tax advice on complex cross-border tax planning arrangements.  

There is, therefore, a significant scope for influencing the demand side – at least in relation to corporate taxpayers – since imposing obligations on the promoter has the advantage of influencing behaviour and having an impact on the supply side of the schemes market.

This is where Council Directive (EU) 2018/822 (DAC6) or mandatory disclosure regime (MDR) comes into play. MDR imposes a primary obligation on intermediaries to disclose cross-border arrangements which are perceived as potential aggressive tax planning, based on general and specific characteristics (hallmarks), in order to be further automatically exchanged between EU member countries. 

In the future, much like the common reporting standard (CRS), the scope of this exchange may be further expanded.

The main objectives of the MDR are: 

  • To obtain early information about tax avoidance schemes, inform risk assessment, and close loopholes before significant tax revenue can be lost;

  • Identify schemes, their users, and promoters in a timely manner; and

  • Act as a deterrent to reduce the promotion and use of avoidance schemes. 

Although, undoubtedly, MDR will help to combat tax avoidance, EU member states must improve their national administrations and systems, to make full and effective use of this tool in the European toolbox. 

In most countries, both legally and professionally, tax advisers have no direct responsibility toward revenue bodies, other than to comply with the law. 

Large professional firms have established strong internal risk management and quality review processes to limit or manage exposures – nevertheless, their primary goal remains to provide services to their clients.

It is, therefore, inevitable that, certain small-sized intermediaries with no legal professional privilege falling under such an obligation, may perceive this as a forced disclosure of confidential advice that could lead to business disruption. Thus, it is essential to create a sense of trust and purpose between intermediaries and tax administration.

For taxpayers, on the other hand, national tax administrations and policy makers need to ensure that disclosure rules are clear, easy to understand, and explicit in relation to criminal offences, in order not to give rise to concerns over self-incrimination through MDR.

In addition, it may be an opportunity for tax policy makers to reflect on the effectiveness of the tax system and improve the law, since research demonstrates that taxpayers are more likely to undertake aggressive tax planning when they perceive unfairness in the tax system.

The goal, after all, is to encourage high levels of disclosure and transparency from taxpayers. Based on OECD studies, taxpayers, from their side, would like to see revenue bodies demonstrate five attributes, which could help build trust. These are commercial understanding, impartiality, proportionality, openness, and transparency. 

This is a new era. All parties need to contribute with subjective morality and professional ethics in building a better working world. Tax is a significant element of this collective effort.

Riana Zanni

Associate partner, EY Greece

E: riana.zanni@gr.ey.com

 

more across site & shared bottom lb ros

More from across our site

Effective audit management requires more than documentation; it’s the way taxpayers engage that can shape audit direction, manage procedural ambiguity, and preserve options for appeal or litigation
American advisers are falling short of client expectations when it comes to providing value-added services, but remaining tight-lipped won’t make the problem go away
Awards
The Social Impact Awards unveil new categories to reflect a changing legal and social landscape
Australia's approach to tax policy has undergone significant shifts in recent years, reflecting global trends and unique domestic considerations. These developments merit close attention from tax professionals
The UK has temporarily dodged the 50% rate due to a trade deal signed with the US in May; in other news, Ryan acquired a Northern Irish tax firm
Following a $28 million funding round, Aibidia wants to ‘double down’ on the US market via partnerships with the ‘big four’, the Finnish TP tech provider’s CEO tells ITR
The Luxembourg-based TP leader tells ITR about relishing the intellectual challenge of his practice, his admiration for Stephen Hawking, and what makes tax cool
The case to determine whether the tariff regime is constitutional will eventually find its way to the US Supreme Court, ITR has also heard
In other news, the Council of the EU pledged support to a CBAM simplification and exemption initiative, and Portugal issued new VAT filing guidance
While Brazil’s sweeping tax updates are a triumph for modernisation, Giuliano Gioia of Sovos warns that MNEs with a Brazilian footprint should be prepared for a short and sharp adjustment
Gift this article