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
  • UK implementation of DAC 6
  • Who has to make a report?
  • What type of arrangements are reportable?
  • The main benefit test
  • Generic hallmarks
  • Specific hallmarks
  • Timing of the report
  • The practicalities of making a report

EU Directive 2018/822 of 25 May 2018 (DAC 6) requires Member States to enact rules obliging ‘intermediaries’ (as defined), and in some cases taxpayers, to report information to tax authorities about cross-border arrangements that contain certain hallmarks. Cross-border means concerning more than one 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 follows on from the Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting 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 came into force on 25 June 2018. Member States had to enact implementing legislation by 31 December 2019, for the provisions to apply from 1 July 2020.

DAC 6 covers arrangements the first step of which was implemented after 25 June 2018, even though the obligation to report does not apply until 1 July 2020. Taxpayers and their advisers should, therefore, have been keeping records of reportable arrangements since 25 June 2018. Under DAC 6, arrangements the first step of which is implemented between 25 June 2018 and 1 July 2020 should be reported between 1 July 2020 and 31 August 2020.