DAC6 (Directive 2018/822) is a new EU mandatory disclosure regime that imposes mandatory reporting of cross-border arrangements. It affects at least one EU Member State that falls within one of several categories or “hallmarks”. Depending on the country, there are significant penalties for non-compliance. All EU Member State have been obliged to transfer the directive to local law by December 2019 however not the EWR States such as e.g. Liechtenstein.

Am I as a consultant affected by DAC6?

Yes, you are considered as an intermediary for DAC6 purposes (professional who provide tax advisory services, from large financial institutions to small intermediaries, e.g., asset managers, lawyers or real estate agents) and as such, affected by DAC6 if you or your company is tax resident in an EU Member State or connected to the EU in any other way.

Are my clients affected by DAC6?

All companies which are tax resident in an EU Member State are potentially affected by DAC6 and its reporting obligation as soon as an arrangement of the company meets any of the criteria listed in the DAC6 hallmarks.

What do I have to do when my clients or me are affected by DAC6?

Timing is critical! Affected intermediaries will have to report within 30 days after the scheme is “made available” for implementation, is “ready” for implementation, or when “the first step” in the implementation has been made – whichever occurs first. All arrangements made in the period from June 25, 2018 to 30 June, 2020 have to be analyzed and if they meet any of the hallmarks, have to be reported by August 31, 2020. As per July 1, 2020 arrangements have to be reported within 30 days. Due to the COVID19 situation, the EU commission has proposed an optional deferral of 6 months. Since it is not yet clear, which countries will adopt the deferral the situation needs to be monitored closely. Nevertheless, there is not much time left for the preparations for DAC6 reporting and we highly recommend to start analyzing the existing processes and make the necessary adjustments now in order to make sure no deadlines and reporting requirements are missed.

Click here for more information regarding DAC6.