Register for our DAC6 email updates

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.

Download full country profile

Continue reading

Register for our DAC6 email updates

VinciWorks is publishing a series of guides on how each EU member state has implemented DAC6. This blog was originally published in July 2020 and was updated in January 2021.

How has Belgium implemented DAC6?

As of 1st January 2021 all EU Member States and the UK have begun their DAC6 reporting.

Legislation Details

The Federal Public Service FINANCE (Ministry of Finance) published the Belgian DAC6 legislation on 30 December 2019. The legislation is called Loi transposant la Directive (UE) 2018/822 du Conseil du 25 mai 2018 modifiant la Directive 2011/16/UE en ce qui concerne l’échange automatique et obligatoire d’informations dans le domaine fiscal en rapport avec les dispositifs transfrontières devant faire l’objet d’une déclaration.

Belgium announced on 30 June 2020 that it would postpone reporting deadlines by six months.

Taxes covered

Belgium legislation covers cross-border arrangements. The legislation is in line with the EU Directive and does not include domestic arrangements or any additional hallmarks.

Legal Professional Privilege

Belgium exempts from reporting intermediaries who are protected by legal professional privilege (e.g. registered lawyers, certified accountants, tax advisors, notaries and company auditors). In these situations, the intermediary must notify other intermediaries or relevant taxpayers and in certain cases the obligation will shift to the taxpayer.

Reporting

Belgium requires reporting to be made by intermediaries and relevant taxpayers using an XML file or electronic upload. Information on reportable cross-border arrangements should be submitted in one of the official Belgian languages and English.

Penalties

Penalties for non-compliance with the reporting obligations range from EUR 5,000 to EUR 100,000, depending on intent and whether it is a first or subsequent offence. 

Download full country profile

Continue reading

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;

Continue reading

Register for our DAC6 email updates

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. 

Continue reading

Register for our DAC6 email updates

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.

Read more

Register for our DAC6 email updates

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

Hallmark D arrangements are those designed to undermine reporting requirements or obscure beneficial ownership. 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.

Continue reading