We are publishing a series of guides on how each EU member state is implementing DAC6. The guide provides a preview to our full up-to-date country-by-country guide to DAC6.
Our next guide focusses on the France’s implementation of DAC6.
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 February 2021.
DAC6 in France
The DAC6 regulations in France impose obligations on intermediaries, including tax advisors, consultants, and lawyers, to report specific cross-border arrangements that exhibit certain hallmarks indicating potential tax avoidance or evasion. These hallmarks include features such as confidentiality agreements, tax-deductible payments, or arrangements involving jurisdictions with no or low taxation.
French DAC6 Rules
The French DAC6 rules define various hallmarks that serve as indicators of potentially aggressive tax planning. These hallmarks encompass aspects such as transactions involving deductible cross-border payments, utilisation of loss-making entities, and engagements with non-cooperative jurisdictions.
Intermediaries are required to submit reports to the French tax authorities within 30 days from the availability, implementation, or completion of the cross-border arrangement. The reporting obligation commenced on July 1, 2020, for arrangements executed after June 25, 2018.
How has France implemented DAC6?
Legislation Details
France’s tax authority, Direction Générale des Finances Publiques, published DAC6 legislation, called:
- Ordinance No. 2019-1068 of 21 October 2019 on the automatic and
mandatory exchange of information in the tax filed in relation to crossborder arrangements (Ordinance No. 2019-1068 du 21 octobre 2019
relative à l’échange automatique et obligatoire d’informations dans le
domaine fiscal en rapport avec les dispositifs transfrontières devant faire
l’objet d’une déclaration), and - Decree No. 2020-270 of 17 March 2020 regarding Information to be
included in the disclosure
on 19 March 2020.
Taxes covered
France’s legislation covers cross-border arrangements. The legislation closely follows the EU Directive and does not include domestic arrangements or any additional hallmarks.
Legal Professional Privilege
France exempts from reporting the intermediaries who are subject to legal privilege under article 226-13 of the French Criminal Code (e.g. lawyers). All professions which are subject to legal privilege under article 226-13 of the French Criminal Code, such as law firms, auditors, accountants, and banks.
Reporting
Reporting will be made online, via the online service of the French tax authorities. The final guidance notes that intermediaries and relevant taxpayers who do not have a tax ID would be needed to take the appropriate steps to obtain one in order to access and report on their dedicated field on the FTA website. The language of reporting is the official language (i.e. French), but it is recommended that information is also provided in English.
Penalties
Failure to meet a reporting obligation (including notification) is penalized with a maximum fine of EUR 5,000 (or EUR 10,000 in case of repeated failure during the current calendar year). The amount of the fine imposed on the same intermediary or taxpayer concerned may not exceed EUR 100,000 per calendar year (as stated in Article 1729 C).
DAC6 resource page
VinciWorks regularly publishes helpful guides, on-demand webinars and articles related to DAC6. These resources are regularly updated as HMRC and other authoritative bodies update their guidance on DAC6 implementation. We will also be adding all of our DAC6 country profiles to the resource page.
You can view all of our DAC6 compliance resources by clicking on the button below.
