DAC6 Reporting Deadline Delayed for a Further Three Months?

Originally, the EU had scheduled 1 July 2020 as the pivotal date for 2020 DAC6 reporting: Reports for Reportable Cross-Border Arrangements (RCBAs) entered into on or after 1 July were due within 30 days of the trigger event, whereas those RCBAs initiated between 25 June 2018 and 30 June 2020 were due in bulk by 31 August 2020. These dates no longer apply, at least in Belgium and Luxembourg. Pursuant to their announcements of last week, 2020 DAC6 reporting in those jurisdictions is pushed back by 6 months (or less, depending on the date of the specific trigger event), as shown in the table below:

The outstanding question is whether the other EU Member States will follow the lead of Belgium and Luxembourg or adopt another set of mooted deadlines. Alternative packages of deadlines could include the original deadlines with 1 July 2020 as the pivot date or the 8 May EC proposal deadlines with 1 October 2020 as the pivot date. Ideally, however, the other EU Member States will adopt the full 6-month delay as it will preserve cohesion across the regime, avoiding uncertainty in the rules, delays in reporting and needless complications for RCBAs involving multiple EU jurisdictions. However, the possibility of fragmentation cannot be excluded and we must brace ourselves for a motley set of reporting deadlines for 2020 DAC6 reporting.

By retaining the overall reporting structure, the EU ensures that all information intended to be reported still needs to be reported in spite of the shifting deadlines. However, as a core aim of DAC6 is to identify an “aggressive” tax-planning scheme before it spreads widely, the longer delay saps more force from the DAC6 regime. Nonetheless, as was made clear in the preamble to the EC’s delay proposal, the pandemic and consequent EU-wide lock-downs left few alternatives as the reporting preparations of the affected parties–essentially, financial intermediaries and the tax authorities–were severely impaired due to emergency work limitations and personnel re-allocations.

For those not yet versed in the incoming disclosure regime, now is the time to ready yourself for it. DAC6 specifies sets of characteristics indicative of aggressive tax planning–labelled “Hallmarks”–and compels the disclosure of any cross-border transactions or other activities evidencing these Hallmarks. DAC6 mandates that for any reportable arrangements, the EU intermediaries involved in the transaction–such as tax advisors, lawyers, accountants and fiduciaries–or the taxpayers affected by it (if no intermediary qualifies) must:

• Disclose specified information
• About the arrangement and the parties involved in it
• To their local competent authority
• Within 30 days
• For exchange on an automatic basis with other EU member states

In light of the analytical and operational demands of DAC6 reporting–including new, sweeping definitions, strict liability standards and rapid turn-around times–many affected parties are seeking outside support. We at BlueBridge offer three distinct services, each tailored to the willingness and capacity of our clients to become experts themselves in DAC6, as follows:

1. The BlueBridge DAC6 Report Production Service: Designed for our clients with sufficient DAC6 analytical expertise, who are in need of reliable and punctual IT support.
2. The BlueBridge DAC6 Reportability Analysis Service: Designed for our clients with basic DAC6 technical understanding, who are in need of deeper DAC6 analytical and operational support.
3. The BlueBridge DAC6 Report Submission & Liability Relief Service: Designed for our clients with no spare time or capacity to learn DAC6, who are, thus, in need of complete relief from DAC6.

Please visit our homepage to learn more about how BlueBridge can lighten or fully assume your DAC6 disclosure compliance burden so that you can focus your team’s resources on core business matters with complete peace of mind.