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DAC6 Reporting in Ireland
DAC6, which stands for Directive on Administrative Cooperation in the field of taxation (DAC6), is a European Union directive aimed at increasing transparency and combating tax avoidance and evasion. It requires certain intermediaries, such as tax advisors, lawyers, and accountants, to report cross-border arrangements that meet specific hallmarks to their national tax authorities. These authorities then exchange the information with other EU member states.
Ireland, as an EU member state, implemented DAC6 into its national legislation in January 2021.
How has Ireland implemented DAC6?
Legislation Details
Ireland’s tax authority, the Irish Tax and Customs, published the Irish DAC6 legislation on 3 January 2020. The legislation is called Chapter 3A, Part 33 of the Taxes Consolidation Act, 1997 (“TCA”).
Taxes covered
Irish legislation covers cross-border arrangements. The legislation is in line with the EU Directive and does not include domestic arrangements or any additional hallmarks, however, the DAC6 legislation operates in addition to the domestic mandatory disclosure regime introduced in Ireland in 2011.
Legal Professional Privilege
Ireland exempts from reporting intermediaries who are protected by legal professional privilege (such as lawyers, in certain cases) and intermediaries for whom the relevant information to be disclosed is not in their knowledge, possession or control. When LPP applies the obligation will shift to the intermediary or other relevant taxpayer.
Reporting
Reporting should be submitted online via Revenue’s online system, in accordance with current electronic return filing requirements. Reports must be made in English.
Penalties
The level of penalties depends on the type of breach involved and they apply to both taxpayers and intermediaries. They range from EUR 500 to EUR 5,000.
VinciWorks’ full country-by-country guide to DAC6 implementation
Not all EU member states have yet finalised their guidance and additional details, such as legal professional privilege and penalties vary between each state. To help firms save time and money on conducting their own research, VinciWorks has collaborated with Transfer Pricing Services to create a concise country-by-country guide to DAC6 compliance. The guide can be purchased either together with our DAC6 compliance solution or as a standalone tool.
