Category Archives: Thought leadership

Upcoming webinar: OECD’s Mandatory Disclosure Rules (MDR) – What you need to know

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The OECD’s BEPS 12 is a set of principles around Mandatory Disclosure Regimes. To date, the OECD has only developed model rules around Common Reporting Standards (CRS) avoidance and opaque structures. EU member states have implemented OECD’s BEPS 12 through DAC6. The UK announced that as part of the Brexit agreement, they would be transitioning from DAC6 to international rules and introducing their own UK MDR.

MDR has been implemented in non-EU member states such as Gibraltar, Mexico and Argentina, with more countries expected to follow suit. In our next webinar, we will help attendees come to terms with MDR and what it means for your organisation.

The webinar will cover:

  • What is MDR?
  • What will the UK’s MDR look like?
  • How has MDR been implemented around the world?
  • Which other non-EU countries are set to implement MDR?
  • What is reporting best practice?

When registering, feel free to submit any questions you may have using the space provided in the registration form.

Free registration

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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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The Australian Modern Slavery Act – compliance best practice

Is slavery a thing of the past? Unfortunately not. According to the Global Slavery Index, it is estimated that on any given day, there are 15,000 people living in conditions of modern slavery in Australia. Cases of forced labour exploitation are especially high in industries considered high risk, such as agriculture, construction, domestic labour, meat processing, cleaning, hospitality, and food services.

As such, Australia’s implementation of the Modern Slavery Act 2018, which came into effect on 1 January 2019 was a welcome, if overdue, step in the effort to combat modern slavery. While the act technically went into effect last year, 2020 is the first year that organisations that fall within the scope of the law will actually be required to report.

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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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New compliance regulations in China

Sexual harassment and privacy rules in force in 2021

Effective as of January 1, 2021, Article 1010 of the Civil Code obliges companies to adopt measures for preventing sexual harassment in the workplace. This means employers have a duty to take action against sexual harassment. This includes:

  • Having a channel to complain about sexual harassment
  • Having a procedure for investigating complaints
  • Having rules to discipline wrongdoers

What does the law say?

Article 1010 of the Code stipulates that:

“Where a person sexually harasses another person against his or her will through verbal behavior, words, images, physical behavior, or other forms, the victim has the right to request the perpetrator to assume civil liability according to the law.

Government agencies, enterprises, schools and other entities shall take reasonable measures of prevention, acceptance of complaints, investigation and handling, so as to prevent and cease sexual harassment conducted by violators by making use of their powers, supervisor/subordinate relationships, etc.”

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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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