Group companies or individuals are:
- registered as Auditors in Malta
- registered as Accountants in Malta
DAC6 – EU Mandatory Disclosures for IntermediariesPrintable Version
6th Amendment to the EU Directive on Administrative Cooperation
DAC6 comes into effect on the 1st July 2020 and imposes reporting obligations on cross border arrangements (CBAs), relating to direct taxation, that contain at least one of the hallmarks listed in the EU Council Directive 2018/822/EU. VAT and other forms of indirect taxation are therefore excluded from the Directive. this is part of the Administrative Cooperation in (Direct) Taxation in the EU initiative.
A cross border arrangement is an arrangement that includes at least an EU member state and another jurisdiction, where at least ONE of the following conditions must be met:
- Participants not resident same jurisdiction; OR
- Participant/s simultaneously tax resident in 2 or more jurisdictions; OR
- Participant/s has PE in another jurisdiction where part or whole arrangement takes place; OR
- Participant/s carries on business in other jurisdiction where not tax resident and has no PE; OR
- Arrangement impacts on AEOI or identification of UBO or Transfer Pricing.
The term ‘arrangement’ is not defined. Our understanding is that any a transaction, contract, payments or receipt, and a series or a part or one step of these, and a corporate or entity structure, may be considered an arrangement.
The term ‘participant’ is not defined and should therefore be given the broadest interpretation as any person or entity being part of the CBA.
The first reporting period will be between the 1st July 2020 and the 31st August 2020 and the obligation is to report CBAs that occurred between the 25 June 2018 and the 30 June 2020.
As from the 1st July 2020 new CBAs coming into place will need to be reported within 30 days.
The objective of the 6th amendment to the Directive is to provide information to the local tax authorities regarding aggressive tax planning strategies being participated in, advised upon, promoted and implemented by intermediaries and taxpayers in the European Union. This information will be shared with all other EU member states. The duty to report lies with all involved intermediaries and ultimately with the taxpayers. Examples of Intermediaries are Lawyers, Accountants, Trustees, Corporate Service Providers, Tax Advisors and Banks.
DAC6 is implementing the OECD Base Erosion and Profit Shifting (BEPS) Action 12 that aims to discourage aggressive tax planning. The new regulations impose heavy penalties for non-compliance and have substantially tightened disclosure requirements.
The depth and scope of this legislation and its impact on tax planning is unprecedented.
Update 24th April 2020
Request for deferral of DAC6 to the European Commission:
CFE Tax Advisers Europe has requested that the European Commission (and the Council of the European Union) defer reporting deadlines for both mainstream and one-off reporting under DAC6 in order to give both intermediaries and taxpayers the time needed to fulfil their obligations to the full, in view of the current difficulties imposed by COVID-19 mitigation measures.
The full CFE Tax Advisers Europe opinion statement addressed to the European Commission and Council may be accessed through this link.
Update 1st July 2020
DAC6 Optional Deferral Enters Into Force
The proposal as agreed by Member States in early June to defer deadlines for exchange of information under the administrative cooperation directive as a result of the coronavirus crisis has now been published in the Official Journal of the European Union and has entered into force.
The Directive provides the option for Members States to postpone deadlines imposed by the EU Directive on Administrative Cooperation for reporting of relevant cross-border arrangements by 6 months. The Directive also provides that the Council can agree to extend the deadlines in the Directive by a further 3 months, if required by the circumstances surrounding the coronavirus.
The Directive allows Member States to defer deadlines arising out of the Directive as follows:
- Defer time limit for exchange of information on Reportable Financial Accounts from 30/09/2020 to 31/12/20 (note: DAC2 – CRS);
- Defer date for 1st exchange of DAC6 information from 31/10/20 to 30/04/21;
- Defer date for beginning of 30 days period for reporting cross-border arrangements from 01/07/20 to 01/01/21;
- Defer date for reporting ‘historical’ arrangements (that became reportable from 25/06/18 to 30/06/20) from 31/08/20 to 28/02/21;
- Establish the 31/01/21 as the deadline date for reporting arrangements arising between 01/07/20 and 31/12/20.
Certain Member States have already proceeded to introduce legislation transposing the extension to the reporting deadline into domestic law.
Update 20 January 2021
DAC6 guidelines Published:
The Office of the CfR has announced that the Guidelines on the Mandatory Automatic Exchange of Information in relation to Cross-Border Arrangements have been published. Click here to view Version 1.0 of the guidelines.
DAC6 Reporting Entity Registration:
The Commissioner for Revenue has announced that the online registration process applicable to DAC6 Reporting Entities required to submit information in relation to reportable cross-border arrangements is now available. This may be accessed at this link.