The automatic exchange of information is seen as a means to combat tax fraud and tax evasion and following various amendments DAC 6 Directive was implemented to ensure mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements.
DAC 6 requires intermediaries and, in certain circumstances, taxpayers to provide information on reportable cross-border arrangements to the relevant EU Member State tax authority. Cross-Border arrangements require the involvement of an EU Member States and would be considered reportable if they contain certain features known as hallmarks, which cover a broad range of structures and transactions, indicative of potentially aggressive tax arrangements. This disclosure regime applies to all types of taxes except for VAT, customs duties, excise duties and compulsory social security contributions.
Following a decision of the EU Parliament, the reporting deadlines are:
- 28th February 2021 for all cross-border arrangements that commenced between the 25th June 2018 and the 30th June 2020; and
- 31st January 2021 for all reportable cross-border arrangements when the triggering event for reporting occurred between the 1st July 2020 and the 1st January 2021.
Failure to comply with such reporting obligations under the mandatory automatic exchange of information regime in relation to cross-border arrangements may result in penalties being imposed on the person legally responsible.
