DAC6: Who is affected by the EU mandatory disclosure rules?
On 25 June 2018, the most recent amendments to the Directive on administrative cooperation in the field of taxation (Directive 2018/822 of 25 May 2018, i.e. “DAC6”) entered into force. These changes introduced mandatory disclosure requirements for intermediaries and taxpayers.
EU member states had until 31 December 2019 to implement the new rules, which entered into force on 1 July 2020. However, EU member states were allowed to defer the reporting deadlines by 6 months in view of the pandemic. Whilst most EU countries deferred the reporting deadlines by 6 months, Finland and Germany decided to stick to the initial reporting deadlines. Please see our blog for further information about the reporting deadlines.
Here are some examples of how Swiss companies could be affected by these new rules:
- The Swiss headquarters of an international pharmaceutical group receives royalties from its German subsidiary that are preferentially taxed in Switzerland
- This transaction may fall under hallmark C.1(d) of the Directive: An arrangement that involves a deductible cross-border payment and the payment benefits from a preferential tax regime in the jurisdiction of the recipient
- This transaction is generally reportable by the German subsidiary under DAC6
- A relationship manager of a Swiss bank advises a German resident client to invest part of his funds through a life insurance policy that is preferentially taxed in Germany
- This asset restructuring could fall under hallmark B.2: An arrangement that has the effect of converting taxable income into capital, gifts or other categories of revenue which are taxed at a lower level or exempt from tax
- As there is no EU intermediary involved, the German client might be required to report this transaction to the German tax authorities
Swiss trading company
- A Swiss trading company acquires hard-to-value trademarks from a group company domiciled in Ireland
- This transaction could be captured by E.2: An arrangement involving the transfer of hard-to-value intangibles
- This transaction is generally reportable by the Irish company
Download our factsheets to read more about DAC6 (PDFs):
Let KPMG’s knowledgeable team help your organization navigate through the DAC6 requirements. Our services include:
We can provide training sessions on the DAC6 requirements, tailored to the specific requirements of your organization.
It’s important to understand the potential impact of DAC6 on your organization. Our detailed assessment includes an in-depth analysis of products and transactions (both in-house and with regard to clients) that could be in scope, as well as a comparison of the detailed requirements across affected jurisdictions.
Policies and processes
Once the impact of DAC6 on your organization has been determined, we can assist you in establishing appropriate policies, setting up processes accordingly and implementing required mechanisms for ongoing monitoring and potential reporting.
KPMG MDR Processor
KPMG has developed the KPMG MDR Processor to optimize MDR processes. With reporting features for all EU countries, this tool supports efficient workflow management to identify your reportable arrangements.