On 25 June 2018, the EU Directive 2018/822 (DAC6), which introduced mandatory disclosure rules, entered into force. These rules target all kinds of cross-border arrangements that fall under a hallmark of the Directive, irrespective of whether an advisor or intermediary is involved or not.
EU Member States have until 31 December 2019 to implement the new rules, which will be applicable from 1 July 2020. As of 1 July 2020, qualifying intermediaries (or, in certain cases, the respective taxpayer) will be required to disclose information on reportable cross-border tax arrangements to their authorities within 30 days of the earlier of when the arrangement is made available for implementation, ready for implementation or actually implemented.
However, intermediaries and respective taxpayers will also be required to disclose information retroactively by 31 August 2020 on reportable cross-border arrangements that have been implemented since 25 June 2018.
In order for a transaction to be reportable under DAC6, it is required that:
Please read our factsheet for further details on the hallmarks and the information to be reported.
Under DAC6, the primary reporting obligation lies with the intermediary involved in the transaction.
In the following cases, however, the reporting obligation shifts to the taxpayer (individual or company):
As mentioned above, if a transaction falls under a hallmark, but there is no EU intermediary involved, the reporting obligations fall to the taxpayer residing in the EU, i.e., for example, to the EU subsidiary of a Swiss company.
The hallmarks that trigger a reporting obligation are drafted very broadly. They even catch standard transactions such as the following:
Transferring functions to another country
Granting a loan to a Spanish subsidiary
Please see our factsheet for additional examples.
Based on the above comments, DAC6 affects many Swiss companies with EU group entities. Non-compliance with these new rules is not an option, as some countries provide for penalties of up to several hundred thousand euros. Therefore, all Swiss companies with EU group entities should start analyzing their cross-border transactions now, so that they are in a position to comply with the reporting obligations as from July 2020.