European Directive 2018/822 (also referred to as 'DAC 6') was published on 5 June 2018. DAC 6 imposes mandatory automatic exchange of information concerning taxation between European Member States with respect to certain cross-border arrangements. The objective is to enable national tax authorities to respond appropriately to tax planning. However, this kind of exchange is only possible if the information is available to the relevant authorities. This is where your adviser and your company will be subject to additional obligations.
What to report?
In principle, only cross-border arrangements associated with ’a potential risk of tax avoidance'. However, this vague description has been given a very wide-ranging interpretation by the legislator. A list of characteristics that could be distinct indicators of tax avoidance is being used. The focus is indeed specifically on perfectly legal ideas that might result in tax avoidance and would consequently have a negative impact on tax revenues. In order to comply with this reporting duty, a rather technical analysis of the alleged arrangement and whether or not it is subject to the obligation must always be carried out first.
Who should report?
In the main, the obligation is imposed on your adviser. The reporting duty rests on the 'intermediaries' who have a link with one of the Member States. However, if no intermediary is available or they are prevented from reporting by professional confidentiality, this obligation will be transferred in due course to the 'relevant taxpayer', i.e. the person for whom the relevant arrangement is intended. It is quite possible, therefore, that you, your company or another group company will be subject to the new reporting duty.
When to report?
As soon as it is established that an arrangement is subject to the reporting duty, it has to be complied with within 30 calendar days. This period takes effect as soon as the advice can be implemented or is being implemented.
You or your adviser still have time until 30 January 2021 (postponed due to the coronavirus situation) for the initial notification of new arrangements (first stage of implementation or idea to be implemented from 1 July 2020).
Remember, however, that you also need to look into the past as any arrangements implemented between 25 June 2018 and the present must also be notified. There is still time until 28 February 2021 to report these historic arrangements.
In the event of incomplete information being submitted, late notification or failure to report, fines of up to 100,000 euros per violation may be imposed.
Let Moore assist you!
We can assist you in determining whether you are subject to this notification duty and how this can best be dealt with. We can prepare and submit the notification on your behalf. To this end, we can, together with you, analyse and assess the most significant transactions from 25 June 2018 on the basis of the conditions set by the Belgian legislator.
If you would like to pursue this, please get in touch with your regular contact at Moore or the person who deals with DAC 6 reporting: An Lettens, Partner Tax & Legal Services | Business & International Tax, through firstname.lastname@example.org or T | +32 (0)3 210 85 68.
Please do not hesitate to contact us if you have any other questions or require further assistance.