The OECD Model Mandatory Disclosure Rules (MDR), which require the disclosure of cross-border tax avoidance arrangements, enacted in the UK on 28 March 2023. The MDR imposes an obligation on taxpayers and advisers to provide information to the tax authorities about specific arrangements and structures that could potentially facilitate tax evasion. The relevant tax authorities in jurisdictions where the MDR is implemented will then exchange this information with the tax authorities in the jurisdiction where the taxpayer is a resident.
On 30 November 2022, the rules were adopted through the International Tax Enforcement (Disclosable Arrangements) Regulations 2022, in replacement of the DAC6 rules which applied until the end of the BREXIT transition period.
A new portal will be launched by HMRC to provide assistance for MDR. However, the existing DAC6 reporting portal will continue to remain operational until the end of April 2023, allowing arrangements that were made prior to 28 March 2023 to be reported under DAC6.
Disclosable arrangements that are made available or implemented after 28 March 2023 need to be reported within a period of 30 days from the triggering date. Pre-existing arrangements need to be reported within a period of 180 days following the entry into force of the regulations (i.e., by 25 September 2023).
