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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 have until 31 December 2019 to implement the new rules, which will be applicable from 1 July 2020. However, intermediaries and relevant taxpayers will also be required to disclose information on reportable cross-border arrangements, the first step of which was implemented from 25 June 2018.
 

Here are some examples of how Swiss companies could be affected by these new rules:

Pharmaceutical group

  • 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

Swiss bank

  • 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

KPMG’s expertise

Let KPMG’s knowledgeable team help your organization navigate through the DAC6 requirements. Our services include:

Training

We can provide training sessions on the DAC6 requirements, tailored to the specific requirements of your organization.

Impact assessment

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.

Our experts help you choose the right strategy for your business.

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