Strategizing International Tax Best Practices – by Keith Brockman

In response to comments from countries, companies and tax advisors, the EU Commission has prepared a draft Council Directive to extend the DAC6 reporting deadlines by 3-months due to COVID-19 considerations.

The initial report, covering the period from June 25, 2018 to June 30, 2020 will be due by November 30, 2020 (currently August 31, 2020).  The 30-day reporting, currently commencing July 1, 2020, will be delayed until October 1, 2020, thereby the first 30-day report would include the period from July 1 to October 1, due 30 days thereafter.

The legal basis for this change is sourced from Articles 113 (indirect tax) and 115 (direct tax) of the Treaty on the Functioning of the European Union (TFEU).  Reportable cross-border arrangements may relate to both indirect and direct tax, thus both legal bases are relevant for the proposed rules.  As a result, a Directive is required to change the prior legislation.

Member States shall adopt and publish, by May 31, 2020, the laws and administrative provisions necessary to comply with the Directive, and communicate to the Commission accordingly.

The Directive will enter into force on the day following that of its publication in the Official Journal of the European Union. 

The extension will allow reporting parties additional time to collect supporting documentation for the initial reporting date, and develop sustainable processes for 30-day reporting thereafter.  

Click to access 08-05-2020-proposal_for_a_council_directive_amending_directive_201116eu.pdf

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