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NEWS

Controversial taxation rules amendment effective since June


2/8/2018

A taxation rules amendment adopted with the aim to transpose into the national legislation the European Directive DAC 5 entered into effect on 5 June 2018. The purpose of the Directive is to ensure that, in performing international tax administration, Member States’ tax administrators have access to certain client data in the possession of banks, payment services providers, lawyers and other professional chamber members as required by the anti-money laundering law. However, the amendment goes beyond the scope of the transposition by ordering banks, insurance companies and payment services providers to provide client data to tax administrators also within the scope of a tax procedure on a national level. Opponents of the amendment consider this requirement as breach of bank secret and client privacy. The amendment had been rejected by the Senate in April. However, the Chamber of Deputies outvoted the Senate with 123 votes for the amendment.

The proposal according to which the requirement to provide information to the data administrator should apply also to lawyers, notaries and tax advisers has not been adopted finally, due to strong criticism from certain political parties and the general public. As far as the lawyers and other professional chamber members are concerned, the confidentiality duty is, therefore, cancelled only to the extent arising from DAC 5, i.e., for the purpose of international exchange of information in performing the duties under the Act on Certain Measures against the Legalisation of Proceeds from Crime and Terrorism Financing. That said, the requirement may apply to information from the area of trust or escrow, but not to information related to legal assistance.