Category Archives: DAC6

DAC6 is a new regulation that requires intermediaries to comply with mandatory transparency rules and hallmarks. Read the latest guidance on the Directive and get updates on our DAC6 training.

DAC6: Ireland introduce partial reporting

In December 2020 the Irish Revenue amended its DAC6 guidance to include partial reporting when legal professional privilege applies. The Revenue clarified that when only part of the specified information is privileged, then an exemption from reporting will only apply in respect of that information. New guidance is expected to be released in the coming days. 

What is considered to be privileged information in Ireland?

Following discussion with Irish law firms, the Revenue have confirmed that identifying a hallmark would be considered a breach of legal professional privilege. The consensus between the firms is that they would want reassurance from the Revenue that anything reported through DAC6 would only be used for DAC6 compliance purposes. 

What information can still be reported when privileged applies?

The Irish Common Law approach to privilege means that Irish lawyers would be permitted to name a taxpayer involved in an arrangement without revealing any specific details about that arrangement itself.The partial report will therefore include at a minimum the name and details of the taxpayer including their address and Tax Identification Number (TIN). With this information, the Revenue will then be able to follow up with the taxpayer to obtain additional details about the arrangement.

How will partial reports be filed in Ireland?

Right now, you cannot technically file a partial report in Ireland using the ROS process (whether manually or via an XML upload). In due time the ROS system will be amended to allow partial reports, however it is unlikely this will happen before the first DAC6 reports are due. 

As a temporary solution, lawyers who wish to upload a partial report due to legal professional privilege will be required to manually fill in a return via the ‘My Enquiries’ function on ROS in order to upload an Excel file.

Which other jurisdictions require partial reports? 

Germany also accept partial DAC6 reports when legal professional privilege applies to an arrangement. However the German Secrecy Laws differ from Ireland. In Germany only details of the arrangement without details of the taxpayers are included in a partial report, and these can be uploaded via XML using the regular reporting channel. 

VinciWorks is in close contact with tax authorities in all EU Member States and the UK, and continue to implement all legislative amendments in their award winning DAC6 reporting tool.

On-demand webinar: DAC6 is here — What now?

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As of 1 January 2020, all “intermediaries” involved in cross-border arrangements in an EU member state that meet certain hallmark categories are required to begin reporting those arrangements. Some businesses are fully compliant with DAC6 while others have only recently started preparing. VinciWorks has implemented DAC6 reporting systems for over 40 firms, including seven of the top ten UK firms.

During this webinar, our experts explored best practice for reporting, regardless of where you are in this challenging compliance process. We also answered attendee questions.

The webinar will cover:

  • What to do if you just found out about DAC6
  • How different countries are implementing DAC6
  • The UK’s mandatory disclosure regime
  • Best practice for reporting in multiple jurisdictions
  • Answering attendee questions

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How do the UK’s DAC6 amendments impact foreign lawyers working in the UK?

The UK has amended its DAC6 regulations as a result of the Brexit Free Trade Agreement. Only arrangements meeting the Hallmark D category will require reporting in the UK. This means that EU registered lawyers working in the UK might need to file DAC6 reports in the European Union. 

The EU Directive states that in order to be considered an intermediary, a person shall meet at least one of the following conditions:

(a) be resident for tax purposes in a member state;

(b) have a permanent establishment in a member state through which the services with respect to the arrangement are provided;

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DAC6: Will a DAC6 report in the UK provide sufficient evidence for EU member states?

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In light of the amended UK DAC6 regulations as a result of the Brexit Free Trade Agreement, the Netherlands Tax and Customs Administration has confirmed to VinciWorks that a UK DAC6 report will not be accepted as sufficient evidence of a DAC6 report in the Netherlands.  

The Netherlands have confirmed that in line with the DAC6 Directive, they will send all DAC6 reports to the European database. However, the Dutch Mandatory Disclosure Team has made it clear that they have no obligation to share reports in any other way and the Netherlands will not actively do so. We will have to wait and see if and what the EU will decide on the exchange of information between EU countries and the UK. 

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DAC6: VinciWorks hosts HMRC’s James Marshall following the UK’s amendments to DAC6

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On New Year’s Eve, HMRC made a surprise announcement that the UK is limiting the scope of DAC6 to only apply where a category D hallmark is present. This was in line with the UK’s obligations under the Brexit Free Trade Agreement, which requires the UK to implement, at a minimum, the standards and rules which have been agreed in the OECD concerning potential cross-border tax planning arrangements.

Last week VinciWorks hosted James Marshall, HMRC’s DAC6 Policy Lead to find out more about HMRC’s intentions. Here’s a summary of what was discussed:

Reporting for the historic period: HMRC expect only category D Hallmark arrangements to be reported for the historic periods (both the original period and COVID extension periods).

Reporting from 1 January 2021: HMRC expect only category D Hallmark arrangements to be reported.

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HMRC joins VinciWorks in DAC6 webinar – Listen now

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Unexpectedly, and despite comments to the contrary, the UK has decided to implement its own MDR regime. Until this happens, DAC6 still applies in the UK for Hallmark D. Considering that the UK has been a leader in the fight against corruption and tax evasion, its version of MDR will possibly be broader and even more stringent.

It was an honour to host James Marshall of HMRC to discuss the UK’s changes to DAC6 post Brexit.

The webinar covered:

  • What changed with DAC6 in the UK?
  • How do these changes affect DAC6 reporting?
  • How will Omnitrack adapt to these changes?
  • What are the UK’s longer-term plans for MDR?
  • Answering attendee questions

A recording of the webinar is available as a podcast. You can listen to it in Apple Podcasts, Spotify etc. or directly by clicking on the button below.

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DAC6 reporting – What is so special about hallmark D?

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In response to the Brexit Free Trade Agreement, the UK has limited the scope of DAC6 to only apply where a Category D hallmark is present. 

This dramatic change is in line with the UK’s obligations under the Fair Trade Agreement that requires the UK to implement, at a minimum, the standards and rules which have been agreed by the OECD concerning potential cross-border tax planning arrangements.

Hallmark D arrangements are those designed to undermine tax reporting under common reporting standard and transparency rules. This shares substantial common ground with the Mandatory Disclosure Regime (MDR) developed by the OECD. 

The hallmark D category is split into two types of arrangements:

  • D(1) Arrangements that have the effect of undermining reporting requirements under agreements for the automatic exchange of information.
  • D(2) Arrangements that obscure beneficial ownership and involve the use of offshore entities and structures with no real substance.
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DAC6 reporting now open in the UK

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HMRC have opened their DAC6 reporting tool via the Government Gateway. This is not impacted by Brexit changes in UK DAC6 legislation.

A UK-based reporting entity must register to report a DAC6 cross-border arrangement. Registrations can be at the same time that you submit your report or before. 

How to Register

To register on behalf of a business, you’ll need the:

  • Government Gateway user ID and password for the business
  • Unique Taxpayer Reference for the business, if it has one 
  • The registered name for your business on your incorporation certificate

You can register to use the online services here.

After you have registered

Once you’ve registered you’ll receive:

  • a DAC6 user ID
  • a confirmation email

You’ll need this DAC6 user ID to report your cross-border arrangements.

Contact us for a full guide on how to make DAC6 reports in the UK and other EU Member States.

UK to replace DAC6

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How has the Brexit agreement affected DAC6?

In light of the Brexit Fair Trade Agreement that passed through parliament on 30 December 2020, HMRC announced today that there will be major changes in the UK’s approach to DAC6.

DAC6 will cease to apply to the UK at the end of the transition period (11pm GMT on 31 December 2020). At that point, the UK will no longer be obliged to implement DAC6.

Register now for our webinar this Wednesday to discuss the changes

Does this mean that DAC6 will no longer apply in the UK?

The short answer is no. 

The long answer is that the Fair Trade Agreement emphasises that the UK “shall not weaken or reduce the level of protection provided for in its legislation at the end of the transition period below the level provided for by the standards and rules which have been agreed in the OECD at the end of the transition period”. This is a reference to the OECD’s model Mandatory Disclosure Rules (MDR) and includes some elements of DAC6.

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DAC6 in Ireland: Finance Bill 2020 proposes changes to legislation

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Proposed changes to Ireland’s implementation of DAC6 were announced in the Finance Bill 2020. Some of the relevant changes include:

Additional DAC6 exemptions: DAC6 will no longer apply to fees, such as for certificates and other documents issued by public authorities; and dues of a contractual nature, such as consideration for public utilities.

New intermediary exemptions: An intermediary will be exempt from making a return to the Revenue Commissioners if they receive confirmation that such other intermediary has reported, a copy of the specified information provided to the competent authority or an Arrangement Reference Number. 

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