The Amendments to the Directive on administrative cooperation in the field of taxation (DAC6), which impose disclosure obligations on intermediaries and taxpayers, entered into force on 25 June 2018. The EU Commission now proposes to postpone the reporting deadlines under DAC6 by three months.
These new rules cover not only intermediaries who support aggressive tax planning, but also a number of intra-group transactions that are fully in line with local tax rules.
In addition, all EU countries will have to impose fines for non-compliance with these rules. In some countries these fines can exceed several hundred thousand euros. Failure to comply with the reporting requirements is punishable by law, i.e. a fine may be imposed even if the EU company concerned fully complies with local tax obligations.
The following requirements must be met for a DAC6 reporting obligation:
You can find further information on the reporting requirements for transactions in our factsheet.
The EU Member States had until 31 December 2019 to implement the new rules, which will be applicable in all EU countries from 1 July 2020.
DAC6 also covers transactions implemented from 25 June 2018 onwards. Thus, even a restructuring implemented in autumn 2018 may trigger a reporting requirement under DAC6.
As explained below, the entry into force of DAC6 will not be postponed, only the reporting deadlines.
Against the background of the COVID-19 pandemic, the EU Commission has proposed postponing the DAC6 reporting deadlines by 3 months (with the possibility of a further postponement of 3 months):
This postponement can then be extended again by a maximum of three months if the COVID-19 situation in the EU Member States requires a further delay of the reporting deadlines.
Following the publication of this proposal, there were discussions on whether this postponement would be sufficient and whether it would be mandatory for EU countries to adopt it. According to our current understanding, a postponement of the reporting deadlines by 6 months is currently discussed, which will, however, not be mandatory for the individual EU Member States.
Since the postponement of the reporting deadlines will likely not be mandatory for the EU Member States, historical transactions may have to be reported in certain EU Member States in August 2020. Furthermore, DAC6 affects most Swiss companies with EU group companies. Therefore, all Swiss companies with EU group companies should now start analyzing their cross-border transactions, regardless of the postponement of the reporting deadlines. Given the large penalties, even where it is determined that no transactions are reportable, this should still be documented accordingly to maintain an audit trail.