Aggressive Measures for Aggressive Schemes: Human Rights Perspectives

Abstract: The focus of this thesis is the EU Directive on mandatory disclosure rules on intermediaries that make available potentially aggressive cross-border tax arrangements. Its avowed purpose is to arrest base erosion and to address fairness in taxation. It closely follows the BEPS Action 12 principles and has been incorporated in the existing DAC regime as DAC6. As with the rest of the information exchange directives that preceded DAC6, its conflict or collision with human rights (as enshrined in the human rights instruments including the EU Charter of Fundamental Rights and the European Convention on Human Rights) has been the subject of debate. The thesis continues the discussion on the balancing of the collision between tax measures and human rights. In DAC6, regulators will impose a duty upon intermediaries (and on taxpayers, in few cases where intermediaries are excused) to disclose certain information at the earliest possible stage of tax planning. Such an aggressive approach to regulation reflects the resolve of Member States to fix a systemic problem in the international tax system which businesses, particularly large multinational enterprises, exploit through aggressive or abusive tax avoidance. It is clearly a paternalistic approach to regulation and overrides the freedom and initiative of businesses. It confirms that the default legal or regulatory regime placed a higher value on the power to tax over human rights. The thesis concludes that the tension or collision between human rights and the sovereign power of taxation is receptive to adjustments or balancing based on a mutual recognition of the ultimate aim of building a just and civilized society.