Don’t be caught out by DAC6

The EU is increasing the level of transparency another notch in order to detect potentially aggressive tax arrangements. We help you meet DAC6’s massively tightened disclosure rules.

What’s DAC6 all about?

The EU is introducing an additional level of transparency in order to detect potentially aggressive tax arrangements.

The amendment to Directive 2011/16/EU on mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC6 for short) will have far-reaching consequences for tax advisors, service providers and taxpayers – including organisations and individuals in Switzerland and Lichtenstein.

DAC6 imposes mandatory disclosure requirements for certain arrangements with an EU cross-border element where the arrangements fall within certain "hallmarks" mentioned in the directive and in certain instances where the main or expected benefit of the arrangement is a tax advantage. There will be a mandatory automatic exchange of information on such reportable cross-border schemes via the Common Communication Network (CCN) which will be set-up by the EU.

Although the directive is not effective until 1 July 2020, taxpayers and intermediaries need to monitor their cross-border arrangements already as of 25 June 2018. Therefore the time to act is now.

Become DAC6 compliant with our tool

 

How will this work?

DAC6 in 90 seconds
How to prepare for DAC6
Are non-EU companies affected?
If I comply with BEPS, am I prepared for DAC6 too? 

Get in touch with our experts

What arrangements need to be reported?

Who is affected?

These new EU rules can potentially impact any individual or entity involved in designing, marketing, organising, making available for implementation or managing the implementation of potentially aggressive tax-planning arrangements with an EU cross-border element as well as those who provide assistance or advice. On the other hand also taxpayers, both businesses and individuals can potentially be affected, even if they are based in Switzerland or Liechtenstein, e.g.

  • Swiss HQ group with EU subsidiaries or foreign HQ group with Swiss subsidiaries and transactions with EU subsidiaries
  • Swiss tax advisors providing services with a cross-border element where at least one party is located in the EU
  • Swiss law firms providing services with a cross-border element where at least one party is located in the EU
  • Swiss advisors managing the implementation of certain arrangements
  • EU resident individuals or families

When

  • 25 June 2018: Directive comes into force and transitional period starts 
  • December 2019: directive implemented in local legislation
  • July 2020: legislation/regulations implementing DAC6 in member states is effective
  • July 2020: first possible reporting deadline
  • August 2020: reporting deadline for legacy arrangements
  • October 2020: first quarterly governmental exchange
 

Why

The main purpose of DAC6 is to strengthen tax transparency and fight against aggressive tax planning. It broadly reflects the elements of action 12 of the BEPS project on the mandatory disclosure of potentially aggressive tax-planning arrangements as well as the OECD model regarding mandatory reporting of CRS avoidance schemes and opaque offshore arrangements.

What

Mandatory reporting by intermediaries (or taxpayers) and the automatic exchange of information by the tax authorities of EU member states via the Common Communication Network (CCN) for a wide range of cross-border arrangements in relation to individuals and entities

Which arrangements need to be reported?

DAC6 imposes mandatory disclosure requirements for arrangements with an EU cross-border element where the arrangements fall within certain "hallmarks" mentioned in the directive and in certain instances where the main or expected benefit of the arrangement is a tax advantage. There will be a mandatory automatic exchange of information on such reportable cross-border schemes via the Common Communication Network (CCN) which will be set up by the EU.

How

The potentially aggressive tax planning arrangements with a cross-border element need to be reported by the intermediaries to the tax authorities in the country in which they are resident. The EU member states then will share the information with all other member states via the Common Communication Network (CCN) on a quarterly basis.

If the taxpayer develops the arrangement in-house, or is advised by a non-EU adviser, or if legal professional applies, the taxpayer must notify the tax authorities directly.

Penalties

Penalties will be imposed on intermediaries (or taxpayers) that do not comply with the transparency measures. EU member states to implement effective, proportionate and dissuasive penalties.

Help

It is crucial to stay on the right side of the new rules. We are reviewing the practical impact of the directive including working closely with our client and our PwC network colleagues in EU member states.

We are running specific workshops with our clients to assess the initial impact. For more detailed information, please call or email one of the following contacts or your usual PwC contact.


 

Webinar

EMEA webcast on DAC6 
Monday, 25 March 2019, 16:00 – 17:00 CET

The DAC6 clock is ticking. Poland’s already implemented the rules of the directive and other Member States are taking important steps towards implementation. While in general the first reports aren't due until August 2020, all reportable transactions since 25 June 2018, the date the directive took effect, must be disclosed. 

Now is the time to explore the impact of DAC6.

Register

Speakers

  • Pieter Deré - PwC Belgium
  • Arne Schnitger - PwC Germany
  • Bruno Hollestein - PwC Switzerland
  • Agata Oktawiec - PwC Poland

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Contact us

Bruno Hollenstein

Partner Tax & Legal Services, PwC Switzerland

Tel: +41 58 792 43 72

Monica Cohen-Dumani

International Tax Services, EMEA ITS Leader, PwC Switzerland

Tel: +41 58 792 97 18