Episode Details

Mandatory Disclosure Rules (MDR) place reporting obligations on those closest to the arrangement—but responsibility can shift depending on the circumstances. Understanding who must report is critical to avoiding penalties.

⚖️ 1️⃣ Intermediaries (Primary Obligation)

In most cases, the reporting obligation falls on intermediaries.

These are individuals or entities involved in:

• Designing the arrangement

• Marketing or making it available

• Managing or implementing the structure

👥 Who Qualifies as an Intermediary?

An intermediary typically includes anyone who is:

• Resident, incorporated, or managed in a relevant jurisdiction, and

• Involved in the arrangement through design, advice, or services

🧠 Examples of Intermediaries

• Lawyers

• Accountants

• Financial advisors

• Trustees

• Administrators

• Corporate directors (management)

• Offshore compliance service providers

👉 The definition is broad—it captures both creators and facilitators.

🔧 What Counts as “Relevant Services”?

An intermediary may be reportable if they:

• Make an arrangement available for implementation, or

• Provide services connected to it (even indirectly)

👉 Even partial involvement can trigger obligations.

🔄 2️⃣ Relevant Taxpayers (Fallback Obligation)

If no intermediary reports, the obligation shifts to the taxpayer.

📌 When Does This Happen?

The taxpayer must report where:

• There is no qualifying intermediary (e.g., internal planning), or

• The intermediary is exempt (e.g., due to legal professional privilege), or

• The intermediary is located in a jurisdiction without MDR obligations, or cannot comply

👤 Typical Scenarios

• In-house tax structuring by a company

• Use of advisors protected by legal privilege

• Cross-border arrangements involving non-reporting jurisdictions

⚠️ Why This Matters

MDR ensures that:

• Someone always reports the arrangement

• Responsibility cannot be avoided by:

• Using foreign advisors
• Relying on confidentiality
• Structuring around intermediaries

🎯 Key Takeaway

Under MDR:

• Intermediaries report first

• If they cannot or do not, the taxpayer must report

The system is designed so that:

There is no gap in reporting responsibility—only a shift in who must comply.

🧠 Final Insight

MDR creates a chain of accountability:

• Designers → Promoters → Service Providers → Taxpayers

If one link does not report, the obligation moves to the next.