The global outbreak of COVID-19 is significantly affecting businesses and their employees, as well as the wider domestic and global economies. At supra-national level (OECD, EU) as well as at national level, numerous measures have been proposed, adopted or announced to enhance business and household cash flow as well measures to support consumption, investments, health sector and to stimulate employment. For more details on the global COVID-19 measures, please see our Global Navigator with over 100 countries and the Global COVID-19 website.
On the tax administration front, tax measures include but are not limited to tax filing extensions, deferral of tax payments, more flexible tax debt repayments, enhanced VAT refunds and changes in audit policies et al.
Although so far the EU Mandatory Disclosure Regime (DAC 6) reporting deadlines had not been postponed, now the European Commission has decided to propose deferring certain deadlines and issued a respective proposal on 8 May 2020 (read more here).
The proposed rules aim to:
- change the date for the beginning of the period of 30 days for reporting on reportable cross-border arrangements by intermediaries (or taxpayers) under DAC6 by three months, i.e. from 1 July 2020 to 1 October 2020;
- change the date for the reporting of the ‘historical’ reportable cross-border arrangements (i.e. arrangements in the period from 25 June 2018 to 30 June 2020) by intermediaries (or taxpayers) under DAC6 by three months, i.e. from 31 August 2020 to 30 November 2020.
- change the date for the first periodic report for marketable reportable cross-border arrangements by intermediaries under DAC6 by three months, i.e. from 31 October 2020 to 31 January 2021.
- change the date for the first exchange of information between EU Member States on reportable cross-border arrangements under DAC6 by three months, i.e. from 31 October 2020 to 31 January 2021;
The European Commission’s press release which accompanied the publishing of the proposed Directive indicated that the beginning of application of DAC6 will remain as from 1 July 2020.
Based on the EU Commission's proposal the EU Member States shall adopt and publish the necessary transposition rules by 31 May 2020 at the latest and apply the new provisions from 1 June 2020.
Considering the current uncertainty regarding the evolution of the COVID-19 pandemic, the proposed initiative provides for the possibility of further extending once the deferral period for the filing and exchange of information for a maximum of three months. The Commission will be empowered to give such extension by way of delegated acts.
Apart from the proposed extension of deadlines for DAC 6 purposes, the EU Commission has decided to also propose deferring the time limit for exchanges of information on Reportable Financial Accounts for 3 months (under DAC 2), i.e. until 31 December 2020 as well as to postpone the entry into application of the VAT e-commerce package by 6 months (these rules will apply as of 1 July 2021 instead of 1 January 2021).
Closing Remarks
The above deferrals are good news and mean that the EU Commission's leadership has formally adopted these proposals. However, these proposals will need to follow the normal EU decision-making process (unanimous vote, consultation EU Parliament). It remains to be seen whether the Member States will reach political agreement. Impact assessment, analysis and timely action are needed to ensure compliance on and after 1 July 2020. For additional information regarding DAC6, please refer to our webpage.
