What Is Reported Under MDR?

Mandatory Disclosure Rules (MDR) require detailed reporting of arrangements that may undermine tax transparency, particularly those designed to bypass or weaken the Common Reporting Standard (CRS).

In this episode, we break down what types of arrangements are reportable and what information must be disclosed.

🔍 1️⃣ Types of Reportable Arrangements

MDR focuses on arrangements that interfere with transparency—especially under CRS.

⚠️ A) Removal of CRS Reporting

Arrangements are reportable where they:

• Eliminate CRS reporting obligations entirely

• Reclassify entities or accounts to fall outside reporting scope

• Exploit gaps between jurisdictions

👉 These structures aim to avoid reporting at the source.

🕵️ B) Opaque Offshore Structures

Even where CRS technically still applies, arrangements may be reportable if they:

• Obscure or divert the beneficial owner

• Use layered entities or intermediaries

• Create complexity to reduce visibility

👉 The key issue is loss of transparency, not just formal compliance.

📄 2️⃣ Information Required in an MDR Disclosure

When an arrangement is reportable, detailed information must be submitted to tax authorities.

👤 A) Identification of Persons

This typically includes:

• Name, address, and contact details

• Tax Identification Number (TIN)

• Date of birth (for individuals)

🧾 B) Parties Involved

The disclosure must identify:

• The person making the disclosure (intermediary or taxpayer)

• The relevant taxpayer

• Any clients or intermediaries involved in the arrangement

🏗️ C) Description of the Arrangement

A clear explanation of:

• How the structure works

• Its purpose and design

• Key features triggering MDR reporting

🌍 D) Relevant Jurisdictions

Disclosure must include:

• Countries where the arrangement is implemented

• Jurisdictions where it is made available

• Any cross-border elements

⚖️ Why This Level of Detail Matters

MDR is designed to give tax authorities:

• A complete picture of the structure

• Insight into who is involved

• Visibility across multiple jurisdictions

This enables:

• Targeted audits

• Cross-border cooperation

• Early detection of systemic risks

🎯 Key Takeaway

Under MDR, reportable arrangements typically involve:

• Removal or avoidance of CRS reporting

• Structures that obscure beneficial ownership

And disclosures must include:

• Full identification of all parties

• A detailed description of the arrangement

• All relevant jurisdictions

In today’s transparency environment:

It’s not enough for a structure to comply technically—if it reduces visibility, it may still need to be reported.