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DAC6 reporting deadline delayed until Feb 2021

If you have any business arrangements, contracts and transactions which involve parties from two different tax jurisdictions, then you need to consider DAC6. You may well not need to report, but you need to consider evidencing why that it the case.

However, today the government publicised a delay in the reporting requirements to 1 February 2021 (originally 31 August 2020).


DAC6 has been one of the shadows hanging over companies and their advisors since last year.


It relates to cross border arrangements entered into since 25 June 2018 and requires that these arrangements are reported to HMRC where they have certain "hallmarks".


The rules relate to the amendments to EU Council Directive 2011/16/EU, which were updated in response Article 12 of the OECD BEPS initiative. The BEPS project aimed to allocate income fairly between tax jurisdictions (Base Erosion and Profit Sharing).


As DAC6 is part of the international harmonisation, these rules remain unaffected by Brexit.


DAC6 is a cross border tax risk that hasn't gone away and still applies to arrangements since 25 June 2018, but at least the delay will allow intermediaries and companies more time to recover from Covid19 disruption and ensure that the hallmark evidence and reporting obligations are fully in place.


Reporting responsibilities are primarily targeted at intermediaries and professional advisers. However, if you entered arrangements or complex transactions which had a number of advisers and inhouse expertise, then it is important to confirm who intends to determine and evidence the Hallmark and perform the reporting where necessary.


Please don't hesitate to reach out if you need any help in reviewing this tax risk.


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