The new EU Directive on Administrative Cooperation (commonly referred to as DAC6 or the Directive) imposes obligations on “intermediaries” (and taxpayers in certain situations) to disclose any “cross-border arrangements” involving two EU member states or a member state and a third country. The transaction must be disclosed if it meets at least one of the Directive’s specified “hallmarks.”

The disclosure will be made by the intermediary (or the taxpayer) to its member state’s tax authority. There will be a mandatory automatic exchange of information on such reportable cross-border arrangements via a centralized network established by the EU.

The new rules are borne out of the continuing worldwide focus on aggressive tax planning. The purpose of these new provisions is to increase transparency and to ensure EU tax authorities have early access to information regarding tax planning. In addition, the provisions are meant to deter taxpayers from implementing abusive tax schemes.
This In Focus piece provides a deep dive to answer your questions on how we got here, who is obligated to report, what is a cross-border arrangement, what are the hallmarks, what needs to be reported, what is the timeline, and what is the current state of legislation. We also offer our BBH perspective on what you should be doing now.

Read the full InFocus article here.

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The information contained within is as of June 23, 2020. We are monitoring all developments and will be publishing updates in the future