Reports from digital platforms should not disclose attorney-client privilege – UNBA

The introduction of automatic exchange of income information via digital platforms is linked to Ukraine’s fulfillment of its international obligations and the alignment of its legislation with EU rules. However, the new tax regime should not create a mechanism through which tax authorities would obtain data on clients’ communications with advocates.

The Ukrainian National Bar Association submitted comments to the Verkhovna Rada Committee on finance, tax and customs policy regarding draft law No. 15111-d dated April 6, 2026 «On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding the implementation of international automatic exchange of information on income received through digital platforms and the taxation of such income».

The document is intended to implement the OECD Model Rules on reporting by digital platform operators and the provisions of EU Council Directive 2021/514, known as DAC7. The UNBA noted that the very purpose of the draft law is justified; however, while preparing the document for the second reading, it is necessary to eliminate risks to the rights of advocates’ clients, legal certainty for businesses, and regulatory predictability.

The UNBA’s key concern relates to attorney-client privilege. The opinion notes that an advocate who acquires a client through a platform that falls under the definition of a digital platform operator may be classified as a reporting vendor. In such a case, the platform operator would transmit data to the State Tax Service that, taken together, could reveal who specifically contacted the advocate, when it occurred, what service was received, and what fee was paid.

According to the Law «On the advocacy and the practice of law», attorney-client privilege covers any information that has come to the advocate’s knowledge in connection with a client’s engagement. Such information includes the very fact that a client sought legal assistance. The law prohibits the disclosure of such information by an advocate and makes no exceptions for tax reporting purposes.

The UNBA also cited the case law of the Court of Justice of the EU. In Case C-694/20 Orde van Vlaamse Balies, the Court noted that the confidentiality of legal advice covers not only its content but also the very fact of its existence. Consequently, a person has a legitimate expectation that even the fact of consulting an advocate will not be disclosed without their consent. On this basis, the Court found the provisions of the EU Council Directive obligating advocates to report to be incompatible with Article 7 of the Charter of Fundamental Rights of the EU.

According to lawyers’ assessments, Draft Law No. 15111-d lacks a mechanism that would exclude legal practice from the reporting regime of digital platforms or limit the scope of data transmitted. In the event of international exchange, such information may end up with the tax authorities of other states where the guarantees of Ukrainian law on advocacy do not apply.

Therefore, the UNBA proposed supplementing the definition of an exempt seller with a direct provision stating that a person engaged in the practice of law is not a reporting seller within the meaning of the relevant provisions of the Tax Code.

Advocates also pointed out other risks of the draft: assigning the role of tax agent to platform operators, excluding the relationship between the platform and the seller from the scope of the Labor Code, potential tax arbitrage between the platform model and the sole proprietor regime, and exempting acts of the Ministry of Finance and the State Tax Service from regulatory procedures.

The UNBA emphasized that taking these comments into account should ensure Ukraine’s integration into the tax transparency system while safeguarding the guarantees of the legal profession, clients’ rights, and the principle of legal certainty.

The full text of the comments and proposals on Draft Law No. 15111-d, prepared by the UNBA Committee on customs and tax law, can be viewed at this link.