On May 25th 2018 the Council of the
European Union adopted Council Directive 2018/822 (Directive 2018/822) amending
Directive 2011/16/EU as regards mandatory automatic exchange of information in
the field of taxation in relation to reportable cross-border arrangements.
When does it comes into force?
EU Member States shall implement Directive 2018/822 in their national legislations by December 31st 2019 at latest. Directive 2018/822 provisions shall be applied from July 1st 2020. 
Directive 2018/822 will be implemented in Law On Tax and Duties in Latvia.
Who has an obligation to report?
The primary disclosure obligation is on “intermediary” (namely, any person that designs, markets, organises or makes available for implementation or manages the implementation of a reportable cross-border arrangement). For example, credit institutions, insurers, advisors’ firms, accountants, law firms, notaries would be qualified as intermediates and will have to disclose information in respect of the reportable cross-border arrangement.
There are certain exceptions when intermediaries are not obliged to report reportable cross-border arrangement. For example, if in accordance with the national rules, reporting obligations infringes the right to the confidentiality of communication granted by the legislation.
Which cross-border arrangements are reportable?
According to Directive 2018/822 cross-border arrangement means an arrangement concerning either more than one EU Member State or EU Member State and a third country. There is no definition of the “arrangement” as such in Directive 2018/822. Therefore, the arrangement may mean, for example, one transaction or the chain of transactions. The “reportable cross-border arrangement” means any cross-border arrangement that contains at least one of the hallmarks indicating a protentional risk of tax avoidance.
In order to determine whether a respective cross-border arrangement qualified as a reportable, an arrangement test should be done and determined whether hallmarks of a potential risks of tax avoidance are met. Below are indicated the hallmarks based on which shall be determined whether respective cross-border arrangement is reportable.
Test in order to determine whether cross-border arrangement is reportable:
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