As noted in the press release of 8 May 2020, the European Commission is proposing to defer by three months certain deadlines for filing and exchanging information under the Directive on Administrative Cooperation (Council Directive 2011/16/EU, also known as “DAC”). The initiative comes in the form of a Directive amending the DAC and proposes the following:

• As regards the EU mandatory disclosure rules (MDRs) introduced by Council Directive 2018/822/EU (DAC6) (which have been transposed into Maltese law)—
  
  • Change the date for the beginning of the 30-day period for reporting cross-border arrangements from 1 July 2020 to 1 October 2020;
  • Change the date for the reporting of cross-border arrangements that became reportable from 25 June 2018 to 30 June 2020 (the so-called “historical” arrangements) from 31 August 2020 to 30 November 2020;
  • Change the date for the first exchange of information on reportable cross-border arrangements, that is from 31 October 2020 to 31 January 2021;
     
• As regards the EU common reporting standard (CRS) for reporting financial institutions, transposed into EU law via Council Directive 2014/107 (DAC2), defer the time limit for exchanges of information on “reportable financial accounts” by three months, that is until 31 December 2020.

The EC also proposes a possibility to further extend the deferral period once, for a maximum of three additional months. It is proposed that this option would only be invoked if during the initial period of deferral, the exceptional circumstances of severe risks for public health caused by the COVID-19 pandemic persist and the EU Member States are forced to implement lockdown measures.

Unanimous agreement among EU Member States is required in order for the EC’s proposal to be adopted and enter into force. EU Member State representatives are expected to discuss the proposal on Monday, 11 May 2020.

The EC also proposes a delay of the entry into application of the value added tax (VAT) e-commerce package by six months—that is, the rules would apply as of 1 July 2021 instead of 1 January 2021.

Should you have any queries or wish to discuss further, please send an email to covid@kpmg.com.mt.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.