The EU’s new comprehensive reporting regime will go live on 25 June 2018. The EU’s directive (commonly referred to as DAC6) has been officially adopted by the EU and has been published in the Official Journal of the EU on June 5.
This publication is significant as it means that intermediaries (such as tax advisors, lawyers or any other party who provide assistance and advice on tax arrangements) as well as taxpayers must monitor relevant cross-border arrangements the first step of which was implemented between the date of entry into force (25 June 2018) and the date of application of this Directive (1 July 2020).
Intermediaries and relevant taxpayers, as appropriate, shall file information on any of those cross-border arrangements which are reportable by 31 August 2020. It is therefore important for taxpayers and intermediaries to start to monitor arrangements which may fall within these rules now.
So what happens to arrangements which are started on or after 1 July 2020?
For a reportable arrangement which (i) is made available for, or (ii) is ready for implementation, or (iii) has its first step implemented on 1 July 2020 or later, such an arrangement must be reported within 30 days of the earliest date of one of those factors being fulfilled.
The Member States of the EU will have until 31 December 2019 to implement the provisions of the directive into local law and regulations. Penalties will be imposed on intermediaries (or taxpayers) that do not comply with the transparency measures. EU member states need to implement effective, proportionate and dissuasive penalties. Although this is an EU directive, its impact will be felt in Switzerland (e.g. for Swiss groups with EU subsidiaries, Swiss intermediaries advising EU clients etc.).
DAC6 will bring a range of operational challenges (such as how to capture all arrangements in order to determine if they are reportable), as well as strategic questions for multinational groups in terms of tax transparency.
More than happy to discuss how to prepare.
Bruno Hollenstein, Partner PwC Switzerland
+41 (0)58 792 43 72
Bildquelle: Rainer Sturm / pixelio.de