Promoter and general hallmark

August 13, 2024

A promoter is an entity, particularly a tax advisor, lawyer, legal counsel, bank employee, or other financial institution advising clients, who develops, offers, makes available, implements an arrangement, or manages its implementation. The regulation uses the phrase “particularly,” meaning that any entity fulfilling the role of developing, offering, implementing, or managing an arrangement is considered a promoter, even if not explicitly mentioned in the regulation.

How many days to report the tax scheme?

Generally, the promoter is primarily responsible for reporting the tax scheme within 30 days from the date of the first activity related to the implementation of the scheme or the day after the scheme was made available or prepared for implementation. The deadline depends on which event occurs first.

Is the promoter bound by professional confidentiality?

Often, the promoter is subject to professional secrecy obligations. In such cases, for non-standardized schemes, the beneficiary can release the promoter from the obligation of secrecy (this issue remains disputed—many professional associations argue that such release is not possible), and the promoter will be obliged to report the scheme. If the beneficiary does not release the promoter from secrecy, the promoter should inform the beneficiary of the reporting obligation, provide them with all data, and notify the Head of KAS.

Criteria for the general hallmark

The legislator has identified 11 general hallmarks, including:

• the promoter or beneficiary has agreed to keep confidential how the arrangement provides a tax benefit,
• the promoter’s fee is dependent on the amount of tax benefit obtained,
• the actions within the arrangement are based on significantly standardized documentation or take a standardized form that can be implemented with more than one beneficiary without significant changes,
• as a result of changing the classification of income to another source or changing the rules of taxation, there is a reduction, exemption, or exclusion from taxation.

General hallmark and the obligation to report a tax scheme

To establish a general hallmark, only one of the above criteria needs to be met. However, for the obligation to report a tax scheme to arise, the main benefit test must also be met. This test is considered met if the primary purpose of the arrangement is to obtain a tax benefit. For non-cross-border schemes, the criterion of a qualified beneficiary must also be met.

Tags general hallmark, promoter