Mandatory disclosure directive (DAC 6) on new transparency rules for intermediaries formally adopted

On 25 May 2018, the Council of the EU formally adopted the proposal to strengthen tax transparency of supposedly aggressive cross-border tax planning.

The content of the adopted proposal resembles the proposal on which a political agreement on 13 March 2018 had already been reached.

The new transparency rules entail that intermediaries (e.g. tax advisors, lawyers and others who establish and facilitate tax planning) are obliged to report any cross-border arrangement which consists of at least one of the hallmarks as established in the proposal. The Member States are obliged to automatically exchange such received information with the tax authorities of other Member States under a centralized exchange mechanism. In the case of non-compliance with the transparency provisions, Member States are obliged to impose proportionate penalties which bear a dissuasive effect.

The Member States have to adopt and publish the domestic laws, regulations and provisions implementing DAC 6 by 31 December 2019. The entry into force of DAC 6 is on the twentieth day following the day of the publication of DAC 6 into the Official Journal of the EU (expected around June or July 2018). The disclosure requirements will apply from 1 July 2020 and the first cross-border exchange of information is to be transmitted by 31 October 2020.  

All arrangements of which the first step of implementation takes place after the entry into force of the DAC 6 – hence, expected around June or July 2018 – qualify as reportable arrangements and will need to be disclosed on 1 July 2020.

For detailed information on the new transparency provisions, see: Political agreement on proposal for mandatory disclosure of aggressive tax planning schemes