Following on from the EU Commission’s proposal in May to extend certain DAC6 reporting deadlines by three months, EU Member States have reportedly reached a political agreement on a replacement proposal which, if adopted, would extend DAC6 reporting deadlines by up to six months.
This is welcome news for many businesses and Member States given the challenges they are currently facing as a result of COVID-19. However, given the optional nature of the proposal, close attention will need to be paid to these reporting deadlines as it is possible that different Member States will have different deadlines.
EU Member States reportedly reached a political agreement in early June to allow Members States to extend certain DAC6 reporting deadlines by up to six months in light of the disruption caused by COVID-19.
This new proposal replaces the EU Commission’s proposal last month to defer DAC6 reporting deadlines by three months. Further details of this can be found in our previous alert.
DAC6 is an EU directive aimed at improving transparency between EU tax authorities and eliminating harmful tax practices by introducing mandatory tax disclosure and reporting rules in relation to cross border tax arrangements with certain features or ‘hallmarks’.
Under the new proposal, DAC6 would come into force on 1 July 2020 as planned, but certain key filing and information exchange dates would be deferred by up to six months:
- The deadline for reporting ‘historical’ cross border arrangements (i.e., arrangements that became (or become) reportable between 25 June 2018 and 30 June 2020) would be deferred from 31 August 2020 to 28 February 2021 at the latest.
- The start of the 30-day period for reporting post-30 June 2020 cross-border arrangements would be deferred from 1 July 2020 to 1 January 2021 at the latest.
- The date for the first exchanges of information between EU tax authorities on reportable cross border arrangements would be deferred from 31 October 2020 to 30 April 2021 at the latest.