HMRC confirm DAC 6 reporting deadline deferral
HMRC confirm DAC 6 reporting deadline deferral
The first reporting deadlines under the UK implementation of the EU mandatory disclosure rules (DAC 6) will be deferred by six months.
HMRC have announced that the first reporting deadlines under the UK implementation of the EU mandatory disclosure rules (DAC 6), which come into force on 1 July 2020, will be deferred by six months in order to provide taxpayers and intermediaries dealing with the impacts of COVID-19 additional time to ensure they can comply with their obligations. This article sets out the revised reporting deadlines and key points to note.
The reporting dates will be deferred as follows:
- Arrangements where the first step was implemented between 25 June 2018 and 30 June 2020 (i.e. the look back period) must now be reported by 28 February 2021 (originally 31 August 2020);
- For arrangements made available for implementation, ready for implementation, or where the first step in the implementation takes place between 1 July 2020 and 31 December 2020, reports must be made by 30 January 2021 (originally this was within 30 days of the relevant trigger point after 1 July 2020);
- For arrangements in respect of which a UK intermediary provides aid, assistance or advice (i.e. secondary intermediary) between 1 July 2020 and 31 December 2020, reports must be made within the period of 30 days beginning on 1 January 2021 (originally this was within 30 days of the of the aid, assistance or advice being provided);
- Arrangements which become reportable on or after 1 January 2021 must be reported within the 30-day window as originally proposed; and
- Where periodic reports are required in relation to marketable arrangements, the first such report must be made by 30 April 2021.
The UK Government will amend the International Tax Enforcement (Disclosable Arrangements) Regulations 2020 to give effect to this deferral and HMRC have advised that, as the amendment may not be in force by 1 July 2020, no action will be taken for non-reporting during any period between 1 July and the date that the amended Regulations come into force. There is therefore no expectation that reports will be made in July 2020.
HMRC have advised that, in light of this deferral, they will not switch on the IT system that will be used for reporting on 1 July 2020, but that the system will be made available ahead of the new deadlines. HMRC will use the additional time to work with taxpayers and intermediaries to ensure the system is ready.
Details of the deferral have been published in HMRC’s International Exchange of Information Manual.
HMRC have suggested that they intend to publish guidance shortly to help businesses in their preparations to meet their reporting obligations.
Key points to note
Despite the six-month deferral, please note the following key points:
- The six-month deferral the European Parliament has agreed to is optional – i.e. although the UK has chosen to implement a six month deferral, other territories can implement shorter or no deferrals. Indeed, Finland has already announced that it will not defer the reporting dates, and there is already a requirement to report in Poland;
- The dates of the look back period, being between 25 June 2018 and 30 June 2020 remain unchanged however the date for reporting has been extended by six months;
- The deferral has no impact on the volume of arrangements that will ultimately need to be reported. Therefore, we strongly advise you to continue with your review of arrangements in the look back period, monitor transactions going forward, and continue the design and implementation of a robust DAC 6 compliance process; and
- For the new deferral period it will be necessary to report arrangements made available for implementation, ready for implementation, or where the first step in the implementation takes place between 1 July 2020 and 31 December 2020, by 30 January 2021. This means that arrangements that are not implemented for whatever reason but for which the trigger date for reporting is reached, will still need to be reported by 30 January 2021.
Announcements in other Member States
An alert from KPMG’s EU Tax Centre provides details of the Member States that have made announcements thus far. In summary, official announcements have now been made in the following territories:
- Belgium – six-month deferral;
- Finland – no deferral;
- Gibraltar – deferral of three months confirmed;
- Ireland – deferral confirmed but deferral period not officially announced;
- Luxembourg – six-month deferral; and
- UK – as above.
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