Revenue Executive Officer Practice Questions - Revenue Commissioners Executive Officer Assessment Exam

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Passage: The EU Directive on Administrative Cooperation (DAC6) requires tax intermediaries to report potentially aggressive cross-border tax planning arrangements to tax authorities. In Ireland, these disclosures must be made to the Revenue Commissioners. If an intermediary is bound by legal professional privilege (LPP), the reporting obligation shifts to the taxpayer, who must be notified of this shift by the intermediary. The goal of DAC6 is to increase tax transparency and deter aggressive tax avoidance schemes before they are implemented. What happens under DAC6 when an intermediary is bound by legal professional privilege?

The reporting requirement is waived entirely for both the intermediary and the taxpayer. The intermediary must report the arrangement, but can omit the taxpayer's identifying details. The obligation to report the cross-border tax planning arrangement transfers to the taxpayer. Revenue will automatically reject the tax arrangement as illegal without further review.

Correct Answer:

The obligation to report the cross-border tax planning arrangement transfers to the taxpayer.

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