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The Council Directive (EU) 2018/822 as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangement

DAC 6 is a European Union directive imposing advisers and intermediaries a duty to inform relevant tax authorities on customers’ cross-border arrangements in the field of taxation. The purpose of the mandatory exchange of information is to fight aggressive tax planning, tax evasion and tax avoidance.

In order for a tax arrangement to be reportable it must contain a cross-border element and involve at least one hallmark indicating a risk of tax avoidance. The hallmarks listed in the directive have a relatively broad application. This means that arrangements (such as a transaction) carried out without an underlying tax rationale can become subject to the mandatory reporting. It must be stressed that the reporting obligation apply to advisers involved in the transaction and irrespective of if they have provided taxation advice or not.

Lawyers in Sweden have a in a specific law stipulated confidentiality and an absolute duty of loyalty towards their clients. The Swedish law has made an exception for lawyers’ reporting obligation. On this background Eversheds Sutherland Advokatbyrå will not report arrangements to the Swedish Tax Authority unless the client explicitly instruct us to submit a report and in conjunction therewith waive the confidentiality obligation. If we are not instructed by the client to report, any other advisers not bound by lawyers’ client privilege confidentiality are primarily liable to report and secondly the client.

Pursuant to applicable rules the lawyer shall when exempted from reporting to the Tax Authorities due to confidentiality, inform other advisers of their reporting obligation. Since the confidentiality obligation apply also to other advisers Eversheds Sutherland Advokatbyrå will not inform other advisers of their reporting obligation in any specific matter.

The rules came into effect on 1 July 2020.