EU reporting rules for cross-border tax arrangements—DAC 6
EU reporting rules for cross-border tax arrangements—DAC 6

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • EU reporting rules for cross-border tax arrangements—DAC 6
  • Commencement
  • UK implementation of DAC 6 and the impact of Brexit
  • Interaction with the rules on the disclosure of tax avoidance schemes (DOTAS)
  • Interaction with the OECD’s Mandatory Disclosure Rules (OECD MDR)
  • Who has to make a report?
  • Legal professional privilege (LPP)
  • What type of arrangements are reportable?
  • The main benefit test
  • Generic hallmarks—Category A
  • more

The UK’s disclosable arrangements rules implement EU Directive 2018/822, also known as DAC 6, or the EU Mandatory Disclosure Regime (EU MDR). The rules oblige ‘intermediaries’ (as defined), and in some cases taxpayers, to report information to HMRC about cross-border arrangements that contain certain hallmarks. Cross-border means concerning more than one EU Member State, or a Member State and a third (non-EU) country. The hallmarks are designed to catch tax-planning arrangements, but arrangements without a tax avoidance motive may also be caught.

DAC 6 followed on from the Organisation for Economic Cooperation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) Project, Action 12, on the disclosure of aggressive tax planning, although DAC 6 also applies to arrangements that would not ordinarily be regarded as aggressive tax planning.

DAC 6 amended Directive 2011/16/EU, the Directive for Administrative Cooperation (DAC). This is the fifth Directive amending the DAC and is therefore referred to (counting the original DAC plus the five amending Directives) as DAC 6. For information on the DAC, see Practice Note: Directive for administrative cooperation in the field of taxation (DAC)—FAQs.

This Practice Note is about DAC 6 as implemented in the UK. All EU Member States were required to implement DAC 6, but this is a minimum standard and there are some significant differences between different countries’ rules, for example in the