CMS Expert Guide to DAC6 Directive

The purpose of this guide to the new EU Directive on Administrative Cooperation – DAC6 – is to offer an analysis of the terms and expressions used by the Directive. It should be used as a “glossary” to aid implementation of the reporting regime which applies to intermediaries. This guide therefore does not explain the functioning of DAC6, i.e. the relationships between intermediaries and taxpayers or between intermediaries themselves, deadlines to report etc. Procedural aspects and local specificities are detailed in specific country chapters.

The documents used to draft this guide are mainly drawn from Organisation for Economic Co-operation and Development (OECD) materials, in particular (but not only):

• final report on Action 12 of the Base Erosion and Profit Shifting (BEPS) Action plan on “Mandatory Disclosure Rules” (2015), which is explicitly referred to in Recital n^o 4 of the Directive;
• the Model Mandatory Disclosure Rules for Common Reporting Standard (CRS) Avoidance Arrangements and Opaque Offshore Structures (2018), which are also referred to in Recital n^o 13 of the Directive.

We have also used commentaries published by tax authorities. In particular, we have used the UK Consultation document published on 22 July 2019 by Her Majesty’s Revenue and Customs (HMRC) on disclosable arrangements and the final guidance published on 30 June 2020 that are still of interest despite the UK government’s decision to apply the Directive only for arrangements which meet hallmarks under category D. 1  The French tax authorities (FTA) have also provided guidance on their interpretation of the Directive, which is included in this guide. We also refer to the Belgian, Croatian, German, Italian, Luxembourg and Polish guidance. Other commentaries will be incorporated as they are published. This guide will be completed on an ongoing basis.

Regarding the entry into force of DAC6, the Council of the EU has adopted on 24 June 2020 the revision of the Directive 2018/822 MDR (Council Directive (EU) 2020/876 of 24 June 2020).

As a consequence, upon election, Member States are allowed to postpone the DAC6 reporting deadlines.

Should Member States decide to elect for such extension:

• the deadline to report arrangements for the period 25 June 2018–30 June 2020, originally set on 31 August 2020, could be postponed up to 28 February 2021;
• the 30-day period to report arrangements for the period 1 July 2020–31 December 2020 would only start on 1 January 2021.

Also, the Council may extend the above optional deferral period by an additional three-month period, depending on the evolution of the pandemic.

For further details regarding the postponement of the deadlines, see specific country chapter.

Structure of this guide

This guide is structured as follows: 

• Persons required to report;
• Concept of cross-border arrangement;
• Main benefit test;
• Concept of associated enterprises;
• Hallmarks; and
• Procedural aspects and specifities regarding reportable arrangements in selected jurisdictions