Disclosable cross-border tax arrangements—DAC 6
Disclosable cross-border tax arrangements—DAC 6

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

  • Disclosable cross-border tax arrangements—DAC 6
  • Commencement
  • 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?
  • Intermediaries—definition
  • Intermediaries—employees and partnerships
  • Intermediaries—UK nexus
  • Intermediaries—multiple reporting obligations
  • Relevant taxpayers—definition
  • More...

FORTHCOMING CHANGE: As described in this Practice Note, the scope of the UK’s disclosable arrangements rules was significantly reduced with effect from IP completion day (11pm on 31 December 2020). HMRC intends to repeal the remaining disclosable arrangements rules entirely, and replace them with new legislation specifically to implement the OECD Mandatory Disclosure Rules (MDR). HMRC will consult on the new legislation later in 2021.

EU Directive 2018/822, also known as DAC 6, obliges ‘intermediaries’ (as defined), and in some cases taxpayers, to report information to a tax authority 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

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