UK and International Tax news
EC Proposes Deferral Of DAC 6 Implementation
Friday 22nd May 2020
The European Commission has recently proposed a three month delay to the initial reporting deadlines under the EU mandatory disclosure rules.
On 25 May 2018, ECOFIN adopted the EC’s proposal from June 2017 which provided for rules aimed at requiring intermediaries to automatically disclose information on potentially aggressive tax planning arrangements. These Council Directive rules amended the Directive 2011/16/EU of 15 February 2011- [Directive on administrative cooperation in the field of taxation – DAC 6].
DAC 6 targets intermediaries such as tax advisors, accountants and lawyers that design and/or promote tax planning schemes who will be obliged to report these structures to their tax authorities. In turn, EU member states will exchange this information with each other, further increasing scrutiny around the activities of tax planners and advisers.
The EC has recently proposed deferring deadlines for filing and exchanging information under DAC 6. Member States will have three additional months to exchange information on financial accounts of which the beneficiaries are tax residents in another Member State. Similarly, Member States will have three additional months to exchange information on certain cross-border tax planning arrangements.
The EC proposal will need to be approved by ECOFIN and the European Parliament before it can take effect. Whilst DAC 6 has already been implemented into domestic UK legislation, revisions to reporting deadlines will also need UK government approval.
The new reporting requirements still enter into force on 1 July 2020, with reportable arrangements for steps implemented between 25 June 2018 and 30 June 2020 being reportable originally by 31 August 2020, or by 30 November 2020 if deferred.
For arrangements where reporting is triggered between 1 July 2020 and 30 September 2020, reporting currently due within 30 days will now start from 1 October 2020.
EU member states obliged to exchange information every three months after that. The first exchange will take place by 31st October 2020.
If you would like more details on the new disclosure requirements, please contact Keith Rushen on 0207 486 2378.