In the latest newsletter the Council of Bars and Law Societies of Europe (CCBE) published the following message regarding a consultation CCBE responded to:

Mandatory disclosure on tax matters

On September 8, the CCBE responded to the online Public consultation of the European Commission on further corporate tax transparency where it raised its concerns about possible initiatives aiming at extending corporate tax transparency through reporting requirements; which would affect all lawyers, particularly those who advise on tax matters. A lawyer may not be able to disclose information because of the assertion of legal professional privilege or professional secrecy. In addition, a lawyer may not allow his or her independence to be compromised by a State authority or any other powerful interests. Hence, a lawyer cannot be compelled to report to tax authorities as confidentiality and independence are essential to the rule of law.

The CCBE also stressed that lawyers are bound to act within the law when providing legal advice or assisting clients, and if a lawyer acts as counsel or assists a client in a manner that they know to be illegal or fraudulent, be it in tax or other matters, such a lawyer would be liable for sanctions.

Similarly, the CCBE also put forward comments in response to a draft report of the European Parliament’s Special Committee on Tax Rulings and other Measures similar in nature or effect, in which they raised their concerns. The report’s proposal, for instance, that the Commission should look into “the possibility of introducing sanctions for firms implementing or promoting tax dodging and aggressive tax planning, in particular with regard to access to funding from the EU budget and any advisory role in EU institutions”, may have implications which are not compatible with the core principles and obligations of lawyers. This also raises questions of concern regarding fundamental rights protected by the European Convention on Human Rights and the Charter of Fundamental Rights of the European Union. Including, for example, the presumption of innocence, right to silence and not to incriminate oneself and legal certainty.

The CCBE’s full response to the European Commission can be found here.