Coronavirus – Confirmed postponement of DAC 6 reporting requirements – UK

• United Kingdom

• Coronavirus - Tax issues
• Tax planning and consultancy - DAC6

26-06-2020

The UK government has confirmed that it is deferring the first reporting deadlines under DAC 6 by six months, in light of the impact of the COVID-19 pandemic.

The European Commission had initially proposed a three month postponement to reporting obligations. However, Member States agreed to an optional six month postponement earlier this month.

What is DAC 6?

“DAC 6” is the name given to EU Directive 2018/822, which is the sixth Directive to amend the Directive on Administrative Cooperation in the field of taxation (EU Directive 2011/16/EU). In summary, DAC 6 requires intermediaries and, in some cases, taxpayers to report information relating to a wide range of cross-border arrangements to EU tax authorities. Each tax authority will then periodically exchange the information they receive with other EU tax authorities.

The commencement date for the reporting and information sharing requirements was originally 1 July 2020, with the first reports due by the end of July.

More detailed information on DAC 6 is available on our DAC 6 hub.

What are the new reporting deadlines?

The six month deferral means that:

• reports for arrangements that became reportable between 25 June 2018 and 30 June 2020 must be made by 28 February 2021;
• reports for arrangements that become reportable between 1 July 2020 and 31 December 2021 must be made within the period of 30 days beginning on 1 January 2021; and
• arrangements which become reportable on or after 1 January 2021 must be reported as normal, within 30 days.

How will this be implemented?

The UK government will need to amend the UK’s implementing regulations to give effect to this deferral. It has indicated that the amended regulations may not be in force by 1 July 2020, but has confirmed that no action will be taken for non-reporting during the period between 1 July and the date the amended regulations come into force.

Eversheds Sutherland comment

This is good news for businesses, as it gives them more time to prepare for reporting. However, this is only a postponement to the filing date for reports - businesses will still be required to collect relevant data on reportable arrangements post-1 July 2020, in addition to the data that should already be collated for arrangements dating back to 25 June 2018.

Businesses should use this time to continue to familiarise themselves with DAC 6 and put in place robust procedures and policies to ensure that they are able to comply with their obligations once reporting goes live.

Lastly, businesses that operate internationally should note that it is up to each Member State to decide whether to postpone DAC 6 reporting requirements. Although most Member States are expected to adopt the postponement, some (including Finland) have already announced that they will not do so.  

If you have questions on how DAC 6 will affect your business, please get in touch.