Continuing their open communication policy, the Dutch MDR team released details of the DAC6 reports submitted to the Dutch tax authorities in January and February 2021. 

There were 4,429 disclosures made between 1 January 2021 and 28 February 2021. 4,259 of the disclosures were for reports in the historical period from 25 June 2018 until 31 December 2020. Only 170 reports related to new transactions. In total 5035 different hallmarks were reported. 35% of hallmark disclosures related to intra-group cross border transfers, covered by hallmark E3. 25% of hallmarks reported concerned the different characteristics of the C1 hallmarks .Hallmark B2, relating to income conversion accounted for 14% of disclosures. 

Below is a summary of the hallmarks that were reported during the period. Some transactions may have contained multiple hallmarks. 

A1: Conditions of confidentiality:

A2: Fee agreements: 3 

A3: Standardised documents or structures: 33 

B1: Acquiring loss making companies:

B2: Income conversion: 723 

B3: Circular transactions: 228 

C1a: Deductible cross border payments: 346 

C1bi: Low or tax exempts recipients: 316 

C1bii: Blacklisted recipient country: 282 

C1c: Hybrids: 90 

C1d: Preferentially taxed recipients: 268 

C2: Same depreciation: 13 

C3: Double taxation: 41 

C4: Transfer of assets: 382 

D1: Undermining reporting obligations: 17 

D1: Other: 59 

D2: Ownership chains: 25 

E1: Unilateral safe harbour rules: 258 

E2: Hard to value intangibles: 357 

E3: Intra group cross border transfers: 1586 

Total hallmarks reported: 5,035

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VinciWorks’ DAC6 Solution offers reporting solutions for international firms for MDR regulations in many jurisdictions including the Netherlands. Get in touch with us to see how Omnitrack can help ensure you are completing your reporting requirements.

The French Supreme Administrative Court has requested a preliminary ruling from the European Court of Justice (ECJ) regarding the DAC6 filing rules applicable to intermediaries in the case of legal professional privilege.

French domestic law states that intermediaries relying on legal professional privilege are still subject to DAC6 rules, and need to obtain their client’s permission to waive privilege and make a report within a 30 day period. If the relevant intermediary does not obtain their client’s consent, then they have to notify other intermediaries of their reporting obligations and a report needs to be made by a different intermediary within 90 days of notification.

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The Dutch MDR team has put a lot of time and energy into open communication throughout the DAC6 process. Whether with intermediaries, software builders or others, the Dutch MDR team has always been available for consultation. The MDR team were aware early on of the potential number of intermediaries and made the decision to update and inform all potential intermediaries via their website, presentations, webcasts, and through their LinkedIn account.

Here is a short overview of how the Dutch DAC6 supervision process operates:

  1. Early on in the process, the MDR team set up clear guidance containing explanations of the DAC6 definitions and criteria. Through the tax authority communicating what, in their should be disclosed there was less room for discussion on these topics.
  2. A clear internal IT process was set up to share the DAC6 disclosures within the Netherlands Tax and Customs Administration, allowing the MDR team to use counter-information from colleagues at the Netherlands Tax and Customs Administration to enhance their review process.
  3. Once the first disclosure has been received, the MDR Team analyses the disclosures from a quality perspective and communicates actively via LinkedIn patterns that they see and what they would like improved. 
  4. The MDR Team set up conversations with disclosures that showed lower quality to discuss how they could be improved in the future.

The Ministry of Finance at the Cypriot Tax Department have announced they will be extending the deadline for reporting DAC6 arrangements to 30th November 2021. 

This extension will apply to all retroactive reporting dating back to 25 June 2018. 

The deadline has been extended for all the following cases:

  1. Reportable cross-border arrangements that have been made between 25 June 2018 and 30 June 2020
  2. Reportable cross-border arrangements that had been made between 1 July 2020 and 31 December 2020 that required submission within 30 days.
  3. Reportable cross-border arrangements made between 1 January 2021 and 31 August 2021 that required submission within 30 days.

VinciWorks is constantly monitoring DAC6 amendments made by the tax authorities, ensuring that schemas remain up to date, and adding additional reporting XMLs as they become available inside the Omnitrack system.

Click here to find out more about VinciWorks’ award winning DAC6 product.

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.

At the Budget meeting in March 2021, the UK government announced that it would consult on the implementation of the OECD Mandatory Disclosure Rules (MDR). The consultation was expected to be issued in late summer but has not yet been released. It was expected that the consultation period would run until autumn and be finalised in the winter. 

In preparation for the new rules, HMRC has been in touch with relevant stakeholders in order to begin their planning work on the relevant IT systems to be used for reporting to ensure that they design a service and guidance that are quick and simple to use.

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

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.

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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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 shock 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.

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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