CJEU Ruling Of 8 December 2022: The Obligation Of Lawyers To Notify Other Intermediaries Pursuant To DAC6 Rules Infringes EU Primary Law

• Published date: 23 December 2022
• Subject Matter: Tax, Tax Authorities
• Law Firm: ELVINGER HOSS PRUSSEN, société anonyme
• Author: Ms Elisabeth Adam and Isabelle Gervais

In a judgment dated 8 December 2022 (Case C-694/20), the Grand Chamber of the Court of Justice of the European Union ("CJEU") ruled that the obligation imposed on lawyers under DAC6 to notify intermediaries other than their own clients, infringes the right to respect for communications between lawyers and their clients guaranteed by Article 7 of the Charter of Fundamental Rights of the European Union ("Charter").

As a reminder, DAC6 provides that all intermediaries (including lawyers) involved in potentially tax aggressive cross-border arrangements are required to report such arrangements to the competent tax authorities. Under DAC6, each Member State may grant a waiver from that reporting obligation to intermediaries that are subject to legal professional secrecy obligations protected under their national law. In such circumstances, intermediaries are, however, required to notify other intermediaries involved in the same reportable arrangement or relevant taxpayers (if no other intermediaries having a reporting obligation are involved) of their reporting obligations.

According to the CJEU, the obligation imposed on a lawyer acting as an intermediary to notify another intermediary who/which is not his client is an infringement of Article 7 of the Charter as it is not strictly necessary to meet the objectives of DAC6, i.e. the fight against aggressive tax planning and the prevention of the risk of tax avoidance and evasion.

In this respect, the CJEU recalls that Article 7 of the Charter protects the confidentiality of all correspondence between individuals and affords strengthened protection to exchanges between lawyers and their clients in view...