The final legislation was recently enacted, although silent on the optional 6-month DAC6 deferral period. Additionally, some highlights include:
- Domestic arrangements are included, withThe guidance VAT
- Additional hallmarks from draft legislation have been removed
- Hallmark E1, unilateral safe harbors, does not include those specified in the OECD guidelines
- Specified penalty amounts are provided
The DACD6 guidelines for Member States are emerging rapidly, and taxpayers/intermediaries will need to react accordingly.
As the Mandatory Disclosure Rules of DAC6 are still being interpreted by Member States, practitioners and advisors, the European Commission has adopted a new package of initiatives, including
- 25-step Action Plan to be implemented between now and 2024, addressing a fair and simple tax system with a focus on technology,
- DAC7, exchange of information by sellers on digital platforms, and
- Tax Good Governance in the EU and beyond, including a review of the EU list of non-cooperative jurisdictions
The tax package is well worth reading, especially the introduction of DAC7, which provides context for the manner in which tax rules and parliamentary procedures must be met prior to formal adoption.
EY’s Tax Alert provides a detailed summary, including links to the initiatives.
Several Member States have started to issue additional guidance, as they prepare for implementation. The UK and Dutch administrations have issued new guidance, although they have both adopted the 6-month reporting deferral.
Examples in both sets of guidance are informative, and may also serve as a trend for other Member States that are in the process of implementation.
However, Germany, among others, remains fairly silent in this guidance as they have not adopted the deferral period, with reporting deadlines at the end of July and August 2020.
The German ministry has advised that they will not delay the optional 6-month reporting obligation, thus the reporting dates revert to the end of July 2020 for 30-day reporting, and 31 August for historical arrangements.
It is interesting to note that Germany has retreated from their prior 30-day delay, citing system setup obstacles. Additionally, this last-minute retreat of position did not affect the delay of FATCA and CRS reporting. The exchange of DAC6 with other Member States by Germany will be delayed due to the positions taken to delay such reporting.
Everyone is awaiting further background on this position, which would align with Finland’s refusal to also adopt the 6-month deferral period.
Finland has provided additional guidance stating they have not elected to defer the COVID-19 6-month dates, thus the original dates of the end of July 2020 and August 2020 apply for reporting 30-day arrangements and historical arrangements, respectively.
Additionally, the guidance provides further clarity on hallmark definitions to apply for reportable cross-border arrangements between Finland and another country.