The Court of Justice of the European Union on 8 December 2022 decided that the obligation for a lawyer to inform other intermediaries in regard of combatting aggressive tax planning is not necessary and infringes the right to respect for communications with his or her client.

The judgment shows that the European legislature is increasingly legislating against fundamental EU rights.

From the press release:

Judgment of the Court in Case C-694/20 | Orde van Vlaamse Balies and Others

Combatting aggressive tax planning: the obligation for a lawyer to inform other intermediaries involved is not necessary and infringes the right to respect for communications with his or her client

All the other intermediaries involved in such planning, and the taxpayer him- or herself, are subject to that reporting obligation, which makes it possible to ensure that the tax authorities are informed

An EU Directive [1] provides that all intermediaries involved in potentially aggressive cross-border tax-planning  (arrangements which could lead to tax avoidance and evasion) are required to report them to the competent tax  authorities. That obligation concerns all those who participate in the design, marketing, organisation or  management of the implementation of that planning. All those who provide assistance or advice in relation to that  planning, or in the absence of such persons, the taxpayer him- or are also covered. However, each Member State  may grant intermediaries a waiver from that obligation where it would breach legal professional privilege protected  under its national law. In such circumstances, lawyer-intermediaries are however required to notify without delay  any other intermediary, or the relevant taxpayer, of their reporting obligations vis-à-vis the competent authorities. (…)

Two lawyers’ professional organisations brought actions before the Belgian Constitutional Court. In their  submission, it is impossible to provide information to other intermediaries without breaching the legal professional  privilege by which lawyers are bound. The Belgian Constitutional Court seeks an answer from the Court of Justice in  that regard. (…)

[1] Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ 2011 L 64, p. 1), as amended by Council Directive (EU) 2018/822 of 25 May 2018 (OJ 2018 L 139, p. 1).

Articles on this blog on the Mandatory Disclosure for Intermediaries Directive are to be found here.