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Coronavirus - European Commission proposes postponement of DAC6 anti-tax avoidance reporting requirements - Europe

  • United Kingdom
  • Coronavirus - Tax issues
  • Tax planning and consultancy - DAC6

12-05-2020

On Friday 8 May 2020, the European Commission (“EC”) issued a proposal for the postponement of the commencement of impending DAC6 reporting requirements in recognition of the impact of COVID-19 on the ability of businesses and Member States to comply with the original reporting timetable.

What is DAC6?

In summary, DAC6 (EU Directive 2011/16/EU) is an EU anti-tax avoidance measure that requires taxpayers and intermediaries across the EU to report information in relation to certain cross-border arrangements to their respective tax authorities. The commencement date for the reporting and information sharing requirements is currently 1 July 2020, with various deadlines for filing first reports following after this date. Detailed information on DAC6 generally is available on our DAC6 hub

What is the postponement proposed?

Broadly, the EC is proposing a three month postponement to various reporting requirements. More specifically, the following postponements are proposed: 

  • Post-1 July 2020 reporting: the beginning of the period of 30 days for reporting reportable cross-border arrangements will be postponed from 1 July 2020 to 1 October 2020;
  • Historical reporting: the date for reporting “historical” cross-border arrangements (i.e. arrangements that became reportable from 25 June 2018 to 30 June 2020) will be postponed from 31 August 2020 to 30 November 2020;
  • Exchange of information: the date for the first exchange of information on reportable cross-border arrangements between Member States will be postponed from 31 October 2020 to 31 January 2021.

It is also proposed that the EC will have the ability to extend the postponement by a further three months, resulting in a total potential postponement of up to six months.

How would this be implemented?

For DAC6 to be amended as proposed, it is necessary for the European Parliament and Council to adopt the proposals. It is anticipated that they will do so quickly. Once adopted, the proposed changes give Member States until 31 May 2020 to implement domestic legislation to effect the proposed postponements. 

Eversheds Sutherland comment

It is first worth noting that it remains possible for Member States to adopt a domestic reporting regime that is more onerous than the EU directive and consequently it is not certain that Member States will adopt the proposed postponement. However, in the context of wider COVID-19 government initiatives to support businesses, it is likely that most will apply these postponements.

More importantly, it seems unlikely that these relatively short postponements will allow many businesses to pause or defer their DAC6 reporting preparations. The proposals are only a postponement to the filing date for reports – businesses will still be required to collect relevant data on reportable arrangements post-1 July 2020, in addition to the data that should already be collated for arrangements dating back to 25 June 2018.

Consequently, while the proposed postponements are welcome and buy time for businesses to continue their DAC6 preparations, it is anticipated that most businesses will need to continue to devote time and resource to DAC6 to ensure robust compliance systems are in place for the commencement of reporting, while continuing to track and collate details of current (as historic) reportable arrangements.

Further DAC6 resources

For more information on DAC6, please see our dedicated hub.