Category Archives: Tax Evasion

DAC6: Ireland releases a new DAC6 Schema but maintains manual filing for LPP reports

The Irish Revenue has released an updated version of the DAC6 Filing Guidelines.

Like many other EU member states, the Revenue has also released a new XML Schema, referred to as Version 1.2. This is in response to the amended DAC6 Central Directory Business Validation Rules by the European Commission. The updated schema can be found here and will apply for all DAC6 reports from 1 August 2021.

To facilitate the migration to the new schema, the Revenue’s electronic filing system for DAC6 on ROS will be unavailable from 1 August 2021. It will reopen on 17 August 2021.

Any DAC6 reports that are protected by legal professional privilege should still be filed via the Revenue’s excel template containing specific information that can be revealed despite privilege.

All the amendments are being updated in VinciWorks’ Omnitrack DAC6 reporting portal. 

Click here to find out more about VinciWorks’ award-winning DAC6 compliance training and reporting product.

DAC6: Member States introduce reporting reforms

Following the UK’s exit from the European Union and in response to the amended DAC6 Central Directory Business Validation Rules by the European Commission, many EU Member States have updated or are in the process of updating their DAC6 XSD reporting schemas.

Belgium

The Belgian tax authorities have released a new XSD Schema version 1.3 and an updated User Guide. This applies to all filings from 1 July 2021. 

Cyprus

The Cyprus tax department has released a new XSD Schema version 4.04. Submissions of the XML file are via the Ariadne portal. There will be no administrative fines for overdue DAC6 submissions until 30 September 2021.

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HMRC continues with UK MDR preparations

In light of the Brexit Fair Trade Agreement that passed through parliament on 30 December 2020, HMRC announced that there would be major changes in the UK’s approach to DAC6. HMRC confirmed in its shocking New Year’s Eve announcement email that in 2021, the UK government would repeal the legislation implementing DAC6 in the UK and instead implement the OECD’s MDR.

HMRC is currently working on the UK MDR consultation document which will seek views from interested parties on the new rules. While there are no confirmed dates, HMRC hopes to issue the consultation document to the public later in the summer. The expectation is that the consultation will run into the autumn, and the legislation will be finalised in the winter.

VinciWorks’ DAC6 reporting solution accommodates reporting in the UK as well as all EU Member States and will provide a solution for the new UK MDR as soon as it is finalised by HMRC.

DAC6: Spanish reporting is live

Following the Spanish parliament’s approval of the final legislation implementing the Spanish Mandatory Disclosure Regime, on 13 April 2021, the Spanish Ministry of Taxation approved the reporting format, and reporting in Spain is now live.

The Spanish Official Gazette published Order HAC/342/2021 which approves the following three forms:

Form 234: For reportable cross-border arrangements by intermediaries or taxpayers.

Form 235: For quarterly reporting obligation of marketable arrangements by intermediaries.

Form 236: For the taxpayers’ annual reporting of cross-border arrangements which are applied in the tax year.

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Jersey Edge Closer to Implementing Mandatory Disclosure Rules

The Taxation (Implementation) (International Tax Compliance) (Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures) (Jersey) Regulations 2020 are expected to come into force in Jersey by the end of 2021. 

What is included in the Jersey Mandatory Disclosure Rules?

The regime is closely aligned with the OECD’s Mandatory Disclosure Rules relating to Common Reporting Standard (CRS) Avoidance Arrangements and Opaque Offshore Structures.

The Comptroller of Revenue is expected to release further guidance in the coming months explaining what exactly will be captured under these arrangements. Arrangements may still be reportable, even if the beneficiaries of such arrangements are not Jersey residents.

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IR35 is here. What do you need to do now?

IR35 is a new law designed to reduce tax evasion among freelancers and contractors. Some workers were disguised employees, meaning they operated as permanent employees but were contracted through their own company to claim tax benefits.

Since 6 April 2021, the way the status of independent contractors is determined by the clients they work for has changed. Now, the onus is on the client to know whether their contractors are inside IR35 or outside IR35.

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On-demand webinar: Tax Evasion – A Global Compliance Risk

The Criminal Finances Act and other global legislation have placed anti-tax evasion measures on the corporate risk and compliance agenda. The past year has shown us that tax evasion enforcement is only ramping up. Increased investigations, large fines and new laws have demonstrated that there has never been a more important time to ensure that everyone in your organisation is on board with your compliance programme.

In this webinar, our experts explored the impact of tax evasion regulations over the past few years and shared best-practice guidance on compliance.

The webinar covered:

  • Why it’s important to have a strong compliance program
  • Reasonable procedures: do you have them and are they enough?
  • Best-practice guidance on spotting red flags
  • An international perspective on tax evasion, including DAC6
  • Major tax evasion cases and what we can learn
  • Tax evasion training requirements and best practice

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The webinar is also available to listen to as a podcast.

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DAC6 Cyprus: No administrative fines until 30 June 2021

On 26 February 2021, the Cypriot Tax Authority announced that it will be extending the timeline for administrative fines in relation to the overdue submissions of DAC6 information in Cyprus. This follows on from the announcement that there would be an extension of the submission of information until 31 March 2021.

The administrative fines in Cyprus will not be imposed on taxpayers or intermediaries as long as the following categories of DAC6 reports are made by 30 June 2021:

Original Historic Reportable Arrangements: Arrangements that were triggered for reporting from the period between 25 June 2018 and 30 June 2020. 

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DAC6 Belgium: Reporting Challenged in Constitutional Court

In December 2020, the Belgian Constitutional Court (Grondwettelijk Hof) decided to refer a preliminary question to the European Union Court of Justice in relation to DAC6. The preliminary question in Case number C-620/19 is around whether the DAC6 notification obligation infringes on the right of a fair trial and the right to private life under the EU Charter of Fundamental Rights.

In light of the professional secrecy restrictions, the Belgian Association of Tax Lawyers argued before the Constitutional Court that it is impossible to fulfil their notification obligation towards other intermediaries.

They claim that information that is protected by professional secrecy in respect of the authorities is also protected in respect of other intermediaries who may be involved. They believe that the DAC6 reporting obligations infringe the right of a fair trial and the right to private life. Both of which are guaranteed in the Charter of Fundamental Rights of the EU.

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