EU Council agrees on deferral of certain tax reporting deadlines
EU Council agrees on deferral of certain tax reporting
The Council of the European Union today, 24 June 2020, announced that the EU will give EU Member States the option of more time to comply with certain rules on cross-border information reporting (MDR and CRS). The deferral is provided as a response to the coronavirus (COVID-19) pandemic.
Following informal agreement reached by EU Member States in early June 2020 and green light from the European Parliament on 19 June 2020 (read Euro Tax Flash for further details), the Council of the EU announced that it has adopted an amendment to the Directive on Administrative Cooperation (DAC) allowing EU Member States an option to defer the time limits for:
- Automatic exchanges of information on financial accounts of which the beneficiaries are tax residents in another Member State—i.e. the EU common reporting standard (CRS) for reporting financial institutions (DAC2), and
- Filing and exchange of information with respect to mandatory disclosure requirements (MDRs) for intermediaries and relevant taxpayers under the Directive on Administrative Cooperation (DAC6).
With respect to DAC6, the amendments as adopted give EU Member States the option to delay the deadlines for filing information on reportable cross-border arrangements by up to six months, as follows:
- By 28 February 2021 (previously 31 August 2020) for arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 (so-called “historical arrangements”)
- The start date for the 30 days reporting deadline to begin by 1 January 2021 (originally 1 July 2020), including with respect to cross-border arrangements for which the reporting trigger occurs between 1 July 2020 and 31 December 2020
- The new deadline for the first periodic report on marketable arrangements will be 30 April 2021
The EU Council’s announcement notes that the optional deferral is in response to the severe disruption to the activities of many financial institutions, tax advisers, and tax authorities caused by the COVID-19 pandemic and lockdown measures. The amendment provides the possibility for the Council to extend the deferral period once, for a maximum of three further months. Any extension would depend on the evolution of the pandemic and would be subject to strict conditions.
The amendment will enter into force on the day after its publication in the Official Journal of the EU, which is expected shortly.
It is up to each EU Member State to decide the (length of the) deferral. EU Member States that have already made announcements in this respect include Belgium and Luxembourg (will opt for the full six-month deferral), Ireland (deferral confirmed, intended timeframe to be announced) and Finland (will not opt for a deferral). A number of other EU Member States have only informally announced their intention to opt for a six-month deferral, but are yet to make official announcements in this respect.
For more information, contact a tax professional with KPMG’s EU Tax Centre
Robert van der Jagt | +31 889 0 91 356 | VanderJagt.Robert@kpmg.com
Raluca Enache | +31 889 0 91 465 | Enache.Raluca@kpmg.com
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. 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 endeavor 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. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.