Overview of the DAC 6 disclosable arrangements regime

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Overview of the DAC 6 disclosable arrangements regime
  • What is DAC 6?
  • Implementing DAC 6 in the UK
  • UK DAC 6 reporting in a nutshell
  • Further information on DAC 6
  • Which arrangements will be caught by DAC 6?
  • Who is responsible for making a DAC 6 report?
  • Intermediaries
  • Taxpayers
  • DAC 6 administrative matters
  • More...

Overview of the DAC 6 disclosable arrangements regime

What is DAC 6?

DAC 6 is the name given to an EU Directive that requires member states to enact rules designed to provide tax authorities with more information about direct tax planning arrangements.

Intermediaries, and in some cases taxpayers, must report information about cross-border arrangements that contain certain characteristics, or ‘hallmarks’. For this purpose, the term ‘cross-border’ involves more than one member state, or a member state and a third (non-EU) country. The overall aim is to provide tax authorities with more information about direct tax planning arrangements, although some of the hallmarks are widely drafted such that certain arrangements without a tax avoidance motive may also be caught.

Implementing DAC 6 in the UK

The UK regulations that implemented the provisions of the Directive (sometimes referred to as the ‘disclosable arrangements’ rules in the UK) came into force on 1 July 2020. This date fell within the implementation period (IP), when the UK was still treated for many purposes as if it were an EU member state. HMRC produced detailed guidance at IEIM600000 onwards.

However, the UK Government issued amendment regulations, which took effect on IP completion day (31 December 2020) to significantly reduce the scope of the UK regime. All the hallmarks were removed, other than those in Category D. The EU-UK Trade and Cooperation Agreement (TCA) requires the UK to abide by OECD rules on exchange of information on cross-border arrangements. The category D hallmarks have been retained, as this enables the UK to comply with the OECD Mandatory Disclosure Rules (MDR).

Further changes are expected, as HMRC intends to completely repeal the DAC 6 legislation and repl

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