DAC6 Archives | Page 12 of 14

Course & Product Updates DAC6 Omnitrack Thought Leadership
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2 min read

DAC6 reporting portal – New dashboard to stay on top of deadlines

One of the most important aspects of DAC6 compliance is making sure intermediaries report transactions within the reporting deadline. Having consulted with over 50 leading international firms and HMRC, we have updated the DAC6 portal dashboard to make it easier for administrators to stay on top of deadlines. Our customisable dashboard will allow firms to easily track when a deadline is approaching, see what’s overdue and review what has been reported.

What are the key features of the new DAC6 portal dashboard?

1. Clear overview of the status of reports

Screenshot of DAC6 reporting portal dashboard

Failure to submit a report can result in a fine from HMRC. The dashboard gives a clear, customisable visual overview of the upcoming deadlines and overdue reportable transactions.

Course & Product Updates DAC6 Omnitrack Thought Leadership
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3 min read

DAC6 reporting portal feature update – Set up automated reminders

Under DAC6, special entities, known as intermediaries, must log certain cross-border transactions that may have a tax implication and where necessary report these to local tax authorities. They should therefore start registering and keeping track of all cross-border transactions. VinciWorks has consulted with 50 leading international firms, as well as HMRC, to build a best-practice DAC6 reporting solution. The portal allows intermediaries to record all cross-border transactions while guiding them on which transactions require reporting.

Keeping track of all DAC6 reports

When it comes to DAC6 reporting, how do you make sure matters are not falling through the cracks? At matter intake, partners are unlikely to have all the details of the transaction and there needs to be a way to trigger the DAC6 review at a later time. To solve the problem, we have added a new feature that allows administrators to build flexible reminders that will trigger emails to the relevant parties when a submission needs to be reviewed or has an upcoming reporting deadline.

DAC6 Legislation – A Guide to UK Implementation

Cover of the DAC6 guide to UK implementation

Following engagement with relevant parties for over a year, together with a written consultation document and review period, HMRC laid their DAC6 Regulations before Parliament on 13 January 2020 under the International Tax Enforcement (Disclosable Arrangements) Regulations 2020, Statutory Instrument 2020 No. 25. However, trawling the Directive, the consultation paper and draft guidance to find that one piece of information you need is proving to be a real challenge.

We have summarised all of HMRC’s guidance into an easy-to-read guide answering many of the questions we’ve received from firms.

Here are some of the areas of DAC6 compliance the guide covers:

The extent to which Brexit will affect DAC6 implementation in the UK
Transfer of information between EU member states
Defining intermediaries and who needs to report
Reporting exemptions
Understanding hallmark categories

Download guide

HMRC answers questions from leading firms on DAC6 implementation and reporting

On Wednesday 29 January, over 50 leading international firms joined us for our third DAC6 core group meeting. During the meeting, our panel, which included HMRC’s Policy Lead for DAC6, took questions from our 100-strong audience to try to make sense of the Directive and fill in some missing details. Here is a summary of the discussions with HMRC:

Brexit

Brexit will not have any immediate effect on the UK’s implementation of DAC6. The Directive will continue to apply in full at least for the duration of the transition period or until a deal is reached.

DAC6 reporting obligations

All intermediaries have a reporting obligation. The primary interest of HMRC is to receive the correct information about transactions so that they can assess whether a transaction needs further review. While the Directive mandates reporting deadlines, reports should include as much relevant information as possible.

DAC6 – The biggest compliance challenge since the Bribery Act

DAC6 core group meeting photo of experts — From left to right: VinciWorks’ COO Josh Goodhardt, VinciWorks’ Legal and Research Exec Ruth Cohen, Freshfield’s Senior Knowledge Lawyer Brin Rajathurai, Transfer Pricing Services’ Founder Adrian Luca, VinciWorks’ CEO Howard Finger and VinciWorks’ Director of Best Practice Gary Yantin

29 January 2020, London

Over 100 people from 50 top law firms, accounting firms and banks gathered at the offices of Freshfields Bruckhaus Deringer in a meeting organised by VinciWorks to fire questions at HMRC regarding the latest EU tax transparency law, DAC6.

HMRC have just published legislation implementing DAC6 and firms are scurrying to fully get to grips with the tremendous impact it will have on how law firms, banks and accountants do business. In response to a question about the impact of DAC6, the head of compliance at a top-five global law firm described the Directive as “the most difficult piece of legislation we’ve ever had to grapple with”.

UK DAC6 legislation: HMRC take a more proportionate approach following consultation

The UK’s final DAC6 legislation was adopted by Parliament on 13 January 2020. Significant amendments have been made to the UK’s legislation based on the feedback from the 11-week consultation phase that the HMRC carried out last summer. The final UK legislation takes a much more proportionate interpretation of the EU Directive than the previous draft.

Here is a summary of five key amendments you should be aware of:

1. Penalties

HMRC amended the penalty regime to ensure it is proportionate and flexible enough to deter non-compliance while at the same time not penalising cases where genuine mistakes were made.

DAC6
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4 min read

UK DAC6 legislation laid before the House of Commons

On 13th January 2020, HMRC laid the UK’s DAC6 legislation before the House of Commons in the form of the International Tax Enforcement (Disclosable Arrangements) Regulations 2020, Statutory Instrument 2020 No. 25. The legislation will come into force on 1 July 2020. Reporting will be required for transactions in which the first step of implementation was carried out on or after 25 June 2018.

What is DAC6?

DAC6, the 6th Directive on Administrative Cooperation, requires taxpayers and their advisers (“intermediaries”) to report details of certain types of cross-border arrangements to HMRC. Arrangements are reportable if they contain certain characteristics (“hallmarks”) that could be used to avoid or evade tax. Just because a transaction is reportable under DAC6 it does not always mean that it is not tax-compliant.

DAC6 – dealing with transactions that change over time

Gif showing VinciWork' DAC6 reporting solution — VinciWorks’ DAC6 reporting tool guides intermediaries through the process of determining whether a transaction is reportable

One of the big challenges that intermediaries face in reporting transactions under DAC6 is what to do when things change. Client projects which may have been deemed non-reportable, or which may not even have involved any cross-border elements at the outset, may transform into a potentially reportable arrangement later on. The delay between starting work for a client and the matter becoming reportable may be months or even years.

Download a guide to DAC6 compliance

VinciWorks’ DAC6 solution, powered by Omnitrack, guides intermediaries through the process of determining whether a transaction is reportable. It also integrates with existing client and matter management tools via its open API standard. And it now has pre-built integrations with leading matter management tools, such as Intapp Intake, for seamless onboarding of new transactions. However, if a transaction becomes reportable much later on, how should this be handled?

This question can be broken down into two parts:

How should I deal with changing transactions from a technical perspective in Omnitrack?
How should I deal with changing transactions from a personnel perspective in terms of getting people to be aware of what they need to do?

VinciWorks partners with Intapp on comprehensive DAC6 solution

DAC6 is a European regulation aimed at reducing international tax evasion and promoting transparency. The Directive requires law firms to report some forms of tax advice and tax transactions. These “mandatory disclosure requirements” (MDR) are for tax transactions that cross EU borders, where it seems that the primary purpose of the transaction is a tax advantage.

DAC6, like the original Money Laundering Directive, is a fundamental shift to the way that law firms operate. It is not merely a change for compliance teams, it affects the entire practice, including engagement letters, practice management systems and anyone involved in any tax advice.

A comprehensive DAC6 solution requires integration between the different systems involved in practice management.

DAC6 reporting involves many internal and external stakeholders

DAC6: Guidance on HMRC Reporting Requirements

Back in May 2018 the Economic and Financial Affairs Council of the European Union (ECOFIN) adopted the 6th Directive on Administrative Cooperation (“DAC6 Directive”). This new directive requires tax intermediaries to report specific cross-border arrangements.

In July 2019, HMRC released their draft DAC6 legislation together with their consultation document. These documents indicate that HMRC intends to align its reporting requirements with the DAC6 Directive, and HMRC will require intermediaries to report any additional information.