15.05.2020

Deferral of DAC 6 deadlines due to COVID-19

June 2020

Key Facts

The Council of the EU has adopted an amendment to the DAC allowing member states an option to defer by up to 6 months the time limits for the filing and exchange of information

Depending on the evolution of the pandemic, the amended directive also provides the possibility, under strict conditions, for the Council to extend the deferral period once, for a maximum of three further months.

On 24 June 2020 the ECOFIN approved the European Commission’s proposal to create a framework for the EU Member States to defer the initial deadlines for filing and exchanging information with regard to DAC6.

As a result:

The date for the beginning of the period of 30 days for reporting cross-border arrangements which are included in Hallmarks listed in Annex IV to Council Directive 2018/822/EU changed from 1 July 2020 to 1 January 2021;
The date for the reporting of the ‘historical’ cross-border arrangements (i.e. arrangements that become reportable from 25 June 2018 to 30 June 2020) changed from 31 August 2020 to 28 February 2021;
The date for the first exchange of information on reportable cross-border arrangements that feature in Annex IV to Council Directive 2011/16/EU changed from 31 October 2020 to 30 April 2021.

It is important to note that this is an optional deferral. Therefore, it is up to each EU Member State to decide on the deferral and its duration with a maximum of 6 months.

Subject to the development of the COVID-19 pandemic, the optional deferral period may be extended once more by the European Commission, for a maximum of three further months.Take away

Take-away

In response to the COVID-19 pandemic, the initial deadlines for filing and exchanging information with regard to DAC6 can be deferred by the EU Member States for a maximum period of six months.

However, despite this deferral period, taxpayers and their advisors must act now to have systems and processes timely in place for identifying and flagging reportable cross-border arrangements in order to avoid penalties.

Are you ready for DAC6 compliance?

The full ETLC document can be viewed here.