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Effective since June 25, 2018, the EU Council Directive 2011/16, or in short, the DAC 6 directive, covers the mandatory disclosure and automatic exchange of information among EU member states in the field of taxation related to reportable cross-border arrangements. The reporting obligation aims to strengthen tax transparency, prevent tax avoidance and tax evasion.
The subjects of reporting are cross-border tax arrangements which meet at least one or more specific characteristics identified as potentially indicative of aggressive tax planning – the so-called hallmarks.
The hallmarks are the following:
The primary person which is obliged to file the information is the so-called intermediary. It can be any person who:
The obligation may also fall on the relevant taxpayer (in other terms, the user), i.e. any person who:
The relevant taxpayer or user is obliged to report the cross-border arrangement when they propose the reportable arrangement on their own (so-called in-house), when the intermediary is not from an EU member state or when the intermediary is bound by a legal duty of confidentiality.
Failure to comply with DAC6 rules can result in penalties.
|Implementation of Council Directive (EU) 2018/822 (DAC6)||Yes, through the Act No. 343/2020 Coll. By this act the Act No. 164/2013 Coll. on international cooperation in the field of taxation was amended.||Yes, through the Act 72 of 2019. By this act the Act 37 of 2013 on rules for international administrative cooperation in relation to taxes and other charges was amended.||Yes, implemented into Tax Ordinance Act.||DAC 6 rules have been introduced within the Romanian legislation through the Fiscal Procedure Code.||Yes, through the Act No. 305/2019 Coll. By this act the Act No. 442/2012 Coll. on international cooperation in the field of taxation was amended.|
|Effective date||29 August 2020||1 July 2020||1 January 2019||1 July 2020||1 July 2020|
|Implementation of transitory regime of Council Directive (EU) 2020/876||Yes, the following rules apply:
A reportable cross-border arrangement where the first step in its implementation has been made between 25 June 2018 and 30 June 2020 – by 28 February 2021
|Yes||Yes (various deadlines, depending on the obligation)||Yes||Yes, 6 months.|
|Reportable cross-border arrangement definition||Follows DAC 6 Directive||Follows DAC 6 Directive||Also domestic arrangements to be reported in Poland||Follows DAC 6 Directive||Follows DAC 6 Directive|
|Hallmark definition||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive|
|Definition of associated enterprise||Yes, similar to the definition of “related parties” in the Income Tax Act.||The definition of an associated enterprise is set out in Act 37 of 2013 4.§ (9) 9. point.||Reference to the definition of “related parties” in the Income Tax Act, which is used for TP purposes.||Follows DAC 6 Directive||Reference to the definition of “related parties” in the Income Tax Act, which is used for TP purposes.|
|Taxes covered||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive + VAT||Follows DAC 6 Directive||Follows DAC 6 Directive|
|Are the hallmarks covered by the domestic legislation the same as in Annex IV Part II of the DAC6 Directive?||Yes||Yes||Yes (the catalogue under the Polish Tax Code is broader)||Yes||Yes|
|Are there any other additional hallmarks included in the domestic legislation?||No||No||Yes (24 hallmarks in total)||No||No|
|Guidance – whitelisted examples per hallmark||Yes||No||Yes (guidance)||By the beginning of 2021 Ro Tax Authority has published a guideline related to DAC 6||No|
|Guidance – Blacklisted examples per hallmark||No||No||Yes (guidance)||By the beginning of 2021 Ro Tax Authority has published a guideline related to DAC 6||No|
|Has main benefit test been incorporated into domestic legislation?||Follows DAC 6 Directive||Follows DAC 6 Directive||Yes||Follows DAC 6 Directive||Follows DAC 6 Directive|
|Intermediaries||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive|
|Relevant taxpayers||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive|
|Other measures||No||No||Facilitator (reports only if not done by promoter or beneficiary)||No||No|
|How to file a DAC6 return?||Electronically using specific DAC 6 form.||Electronically through a portal of the Hungarian Tax Office using specific KONSTR form.||Electronically through a portal of the Polish Financial Administration using specific DAC 6 form.||To be submitted exclusively online, on the Ro Tax Authority portal.||Electronically through a portal of the Slovak Financial Administration using specific DAC 6 form.|
|Language||Czech or English (additional translation to Czech may be required)||Hungarian||Polish||Romanian||Slovak|
|Information to be communicated||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive||Follows DAC 6 Directive|
|Time limits for mainstream reporting||30 day period||30 day period||30 days||As a general rule, intermediaries having the obligation to report transfrontalier transactions would have 30 days to provide the related info.||30 day period|
|Penalties for non-compliance||Up to CZK 500 000 for each breach of obligations||Up to HUF 5,000,000||Up to EUR 5,800,000.00||Ranging between RON 20,000 – 100,000||Up to EUR 30 000 (can by levied repeatedly)|
The Table shows that some countries when implementing the DAC6 rules went beyond minimum requirements required by the EU directive. For example, Poland extended the scope of reportable transactions to domestic transactions, too. Moreover, they defined additional hallmarks and aim also on VAT. Also penalties for non-compliance, although they differ from country to country, may be material. Therefore, we recommend taxpayers taking care of these rules.
We recommend taxpayers evaluating the cross-border arrangements in which they were/are involved in terms of the above-mentioned characteristics, in order to identify a possible reporting obligation and checking presence of specific DAC6 reporting requirements given by local legislation. The reporting obligation arises only in case when you identify arrangements that are subject to the reporting. Keeping of defence file can help you to prove that you act in compliance with legislation.
Disclaimer: Our questionnaire does not represent a comprehensive analysis of a cross-border arrangement. The questionnaire is meant to help determine whether a person is obliged to file the corresponding documentation based on general criteria only. Accace is not responsible for any person’s or entity’s decisions taken based on our questionnaire’s results. Before taking any action, we recommend you to consult an advisor.
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