DAC 6 / MDR Radar

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DAC 6 / MDR Radar

7 August 2020

Operational Tax News

Issue 6

A new wave of reporting rules became effective in the European Union on 1 July 2020, with retroactive effect to 25 June 2018.

These new requirements were introduced by the latest amendments to the EU Directive on Administrative Cooperation in the field of taxation, commonly known as DAC 6.

It requires intermediaries (and certain taxpayers) to disclose all cross-border arrangements/structures that meet the criteria and hallmarks of DAC 6 to the relevant tax authorities.

Although the implementing deadline has already passed, only 24 countries have transposed these rules into their domestic legislation, while 4 countries are still at the implementation drafting stage.

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Local implementation status

The Directive 2020/876 of 24 June 2020 amending the DAC 6 rules was published on 26 June in the Official Journal. It allows EU Member States to defer the time limits for filing and exchanging the following information by up to six months: 1) the automatic exchange of information on financial accounts where the beneficiaries are tax residents in another EU Member State; and 2) reportable cross-border tax planning arrangements. Depending on how the COVID-19 pandemic evolves, this Directive also allows the Council to extend the deferral period once for a maximum of three months.

Recent developments

European Union

On 3 July 2020, the European Commission closed the infringement procedures against Luxembourg, Romania and the United Kingdom for not implementing the directive on the mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC 6) in a timely manner. Formal notices remain open against Belgium, Cyprus, Czech Republic, Estonia, France, Greece, Italy, Latvia, Poland, Portugal, Spain and Sweden.

Austria

A draft guidance for the implementation of DAC 6 is currently under consultation until 30 July. Based on this guidance, Austria will not defer the reporting deadlines. However, due to technical issues, it should not be possible to file a report with the Austrian tax authorities before October; therefore, there is a de-facto extension of the filing deadlines to 31 October 2020. Other topics in the guidance include the scope of DAC 6 and the exemption from the reporting obligation.

Croatia

On 30 June, Regulation No. 1436 extending the deadlines for reporting financial accounts under the common reporting standard (CRS) and for cross-border arrangements (DAC 6) was published in the Official Gazette.

Cyprus

On 27 July, the tax department announced that the first reporting deadlines under DAC 6 would be extended by six months, in line with the provisions of Directive 2020/876 of 24 June 2020. Further guidance on the implementation of DAC 6 and how to submit the information will be provided in a later tax department communication.

France

On 31 July, Law n° 2020-935 was published in the Official Gazette. Article 53 of the Law opted for the six-month extension of the DAC 6 reporting deadlines provided by Directive 2020/876 of 24 June 2020. In addition, this provision includes certain clarifications and corrections of material errors relating to the initial DAC 6 implementation.

Germany

On 6 July, the Federal Minister of Finance (BZSt) announced that there would be no postponement of the original DAC 6 deadlines. On 29 June, the BZSt released a manual relating to the DAC 6 reporting process. All technical information regarding the XML schema and ELMA interface can be found on the BZSt website. The Foreign Account Tax Compliance Act (FATCA) deadline has been extended to 31 October 2020.

Estonia

On 3 July, the Tax and Customs Board announced the extension of DAC 6’s cross-border reporting deadlines due to the coronavirus pandemic. The deadlines have been extended under the option provided by Directive 2020/876 of 24 June 2020.

Gibraltar

On 10 July, the International Tax Compliance (Amendment) Regulations 2020 was published in the Official Gazette. It transposes Directive 2020/876 of 24 June 2020 amending the DAC 6 rules to address the urgent need to defer certain deadlines for filing and exchanging tax information due to the COVID-19 pandemic.

Greece

On 29 July, the Greek parliament approved a draft law on the transposition of various EU directives. Notably, the proposal includes the implementation of the reporting obligations on cross-border arrangements under DAC 6. It also provides for a six-month deferral of the reporting deadlines following Directive 2020/876 of 24 June 2020. The Law 4714/2020 implementing DAC 6 and extending the reporting deadlines was published on 31 July in the Official Gazette.

Hungary

On 14 July, a law providing various tax measures in response to the coronavirus pandemic was published in the Official Gazette. The §93 of the Law No. LXXVI extends the deadlines for cross-border tax arrangements by six months. On 20 July, the National Tax and Customs Authority of Hungary issued DAC 6 guidelines. The guidelines explain 1) what an intermediary and a relevant taxpayer must report and who is obligated to file when there is more than one intermediary or relevant taxpayer; 2) when and how to report; and 3) the infringement penalties.

Ireland

On 7 July, the Irish Official Gazette published Statutory Instrument No. 240/2020 implementing Directive 2020/876 of 24 June 2020 that extends the reporting deadlines for cross-border arrangements due to the coronavirus pandemic. On 3 July, the Irish Revenue released guidance on the DAC 6 rules. It provides further insight into how the rules operate, which require the mandatory disclosure of cross-border arrangements where certain hallmarks are met. For more details, see the comments published by our colleagues.

Latvia

On 17 July, Regulation No. 449 extends the deadlines for filing and exchanging information under DAC 6 as provided by Directive 2020/876 of 24 June 2020.

Lithuania

On 2 July, the Lithuanian State Tax Inspectorate announced the postponement of the deadlines for filing and exchanging information under DAC 6. They also announced on 7 July that the CRS reporting deadline has been extended to 1 October 2020. More information on notifiable cross-border agreements under DAC 6 and the notification procedure can be found on the website of the State Tax Inspectorate.

Luxembourg

Luxembourg

On 24 July, a law extending various tax information exchange deadlines was published in the Official Gazette. The extensions concern reporting obligations under DAC 6, FATCA and CRS. Along with publishing the new reporting dates, the Luxembourg tax authorities also updated its DAC 6 webpage and provided clarifications about the reporting modalities. For further details, please see our alert on this topic.

Malta

On 2 July, the Maltese government announced that the first reporting deadlines under DAC 6 rules have been extended by six months in line with the provisions of Directive 2020/876 of 24 June 2020. Legal Notice No. 315 extending the reportable cross-border arrangement deadlines was published on 31 July in the Official Gazette.

Poland

On 30 June 2020, a regulation extending the deadlines for exchanging information under DAC 6 was published in the Polish official gazette. It also includes a deferral regarding financial account reporting under CRS and FATCA until 31 July 2020. On 22 July, the Ministry of Finance issued a tax clarification on the support measures of the COVID-19 crisis package. Its third chapter includes information about the scope of the deadline extensions for cross-border tax arrangements (pages 101–102 of this document).

Portugal

On 21 July, the law implementing the DAC 6 rules was published in the Official Gazette. Portugal has been silent on the possibility of extending the DAC 6 deadlines as provided by Directive 2020/876 of 24 June 2020, but a draft bill in this regard was announced on 30 July by the government.

Romania

On 1 July, a government Emergency Ordinance 107/2020 enacted the extension of the deadlines for filing and exchanging information under DAC 6 (See Official Gazette no. 579). The new deadlines reflect the dates proposed by Directive 2020/876 of 24 June 2020.

Slovakia

On 21 July, the Slovak Financial Administration announced a six-month extension of the DAC 6 reporting deadlines due to the COVID-19 pandemic. All information, including the required forms, will be published on the Financial Administration’s website.

Slovenia

On 30 June, the Slovenian Financial Administration announced that the reporting deadlines for DAC 6 will be extended due to the ongoing COVID-19 pandemic. The draft law implementing Directive 2020/876 of 24 June 2020 deferring the filing and exchange of information deadlines related to DAC 6 was also published on the Slovenian government’s website.

United Kingdom

On 9 July, Her Majesty's Revenue and Customs (HMRC) updated its DAC 6 guidance on the extension of DAC 6 reporting deadlines. The new deadlines reflect those of Directive 2020/876 of 24 June 2020 and have been implemented into the UK’s domestic legislation by the Statutory Instrument No. 713/2020.

 

Local specifities

Estonia

Includes additional hallmarks regarding arrangements affecting the exchange of information on financial accounts included in the implementing law.

France

The French legislation exempts permanent establishments of French intermediaries located outside France from the reporting requirement when the arrangement is related to their activity.

Germany

Whereas the Directive distinguishes between promoters and service providers giving aid, assistance or advice, currently the German bill does not specifically reference service providers. If an intermediary has a German nexus, it will trigger a reporting obligation in Germany, regardless of the relevant taxpayer’s residence and where the tax advantage arises.

Italy

Italian financial institutions will be considered as intermediaries for CRS purposes.

Poland

Includes broader disclosure requirements including domestic arrangements and all taxes. Hallmarks are more broadly defined than DAC 6 standards require. Guidance published on 31 January 2019 provides some clarity on the interpretation of the Polish legislation and sets out how the tax authorities anticipate the reporting process to operate.

Portugal

The law includes domestic arrangements and VAT in its scope, as well as additional hallmarks.

Spain

Individuals can also be considered as intermediaries according to the current proposal.

Sweden

Sweden

The law includes domestic arrangements in its scope.


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Previous editions

Issue 1 (6 December 2019)

Issue 2 (17 January 2020)

Issue 3 (10 March 2020)

Issue 4 (20 May 2020)

Issue 5 (2 July 2020)

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