OECD Mandatory Disclosure Rules, technical amendment to primary legislation and Automatic Exchange of Information (AEOI) powers consolidation.
Published 15 March 2023
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Who is likely to be affected
This measure has no effect on individuals and businesses as it consolidates existing powers to lay regulations, including a technical amendment to ensure that one of the powers works as intended.
General description of the measure
The measure implements two changes:
1) It consolidates existing powers that allow Automatic Exchange of Information (AEOI) regulations to be laid. The previous statute relating to these powers will be repealed.
2) It will allow the government to implement future AEOI regimes through regulations. The power to lay the Mandatory Disclosure Rules (MDR) regulations will be subject to a technical amendment so that it works as intended.
Policy objective
The consolidation change helps tax simplification. It simplifies the tax code by placing all powers to lay AEOI regulations in one place and will allow the government to implement future AEOI regimes more efficiently.
The technical amendment will ensure the power to lay the MDR regulations works as intended.
Background to the measure
Existing international AEOI regimes have been implemented under regulation-making powers. These are currently spread across four pieces of primary legislation that allow the regulations to be laid. This measure consolidates those regulation making powers into one piece of legislation.
The power to lay the MDR regulations will be subject to a technical amendment so that it works as intended.
Detailed proposal
Operative date
The measure will have effect on and after the date of Royal Assent to the Finance Bill 2023.
Current law
The AEOI powers are:
i) The Common Reporting Standard (CRS)/Foreign Account Tax Compliance Act (FATCA) in section 222 of the Finance Act 2013. The first regulations were made under this power on 24 March 2015.
ii) Country by Country Reporting (CbCR) in section 122 of the Finance Act 2015. Regulations were made under this power on 26 Feb 2016.
iii) Mandatory Disclosure Rules (MDR)/DAC6 (DAC6 is the EU equivalent of MDR and will be repealed once MDR comes into force on 28 March 2023) in Section 84 of the Finance Act 2019. The first regulations in respect of MDR were made on 16 January 2023. The first regulations in respect of DAC6 were made on 9 January 2020.
iv) Reporting Rules for Digital Platforms in section 129 of the Finance Act 2021. The first regulations under this power are likely to be laid in April 2023.
Proposed revisions
The four AEIO primary powers will be consolidated into one place in the 2023 Finance Bill. The previous statute in relation to these powers will be repealed. The power to lay the MDR regulations will be amended so that it works as intended.
Summary of impacts
Exchequer impact (£m)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| nil | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impact.
Impact on individuals, households and families
As this measure is a consolidation of existing measures and a technical amendment it does not have any impact on individuals, households and families.
Equalities impacts
It is not expected that there will be adverse effects on any group sharing protected characteristics.
Impact on business including civil society organisations
As this measure is a consolidation of existing measures and a technical amendment it does not have any impact on businesses or civil society organisations.
Operational impact (£m) (HMRC or other)
As this measure is a consolidation of existing measures and a technical amendment it does not have any operational impact.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
As this measure is a consolidation of existing measures and a technical amendment it does not require any further monitoring and evaluation.
Further advice
If you have any questions about this change, please contact John Sandeman on Telephone:03000 589386 or email: john.sandeman@hmrc.gov.uk