Tackling tax avoidance and evasion is key to ensure that everyone pays their fair share of tax.

Working with the OECD, the EU Commission and other EU member states, the UK government has introduced the Directive on Administrative Cooperation (DAC6) which aims to identify potentially aggressive tax arrangements by further increasing reporting transparency.

What is DAC6?

DAC6 introduces a requirement for tax intermediaries and advisers to provide tax authorities with details of certain international tax planning arrangements. Where the arrangements fall within certain 'hallmarks' mentioned in the directive and in circumstances where the intended benefit of the arrangement is a tax advantage.

In certain instances the obligation to report falls on the taxpayer and information reported will be shared between tax authorities. There are no de-minimis limits and penalties for failures can be significant, with local country penalties in the range of several million Euros.

EU member states were required to incorporate DAC6 into their domestic law by 31 December 2019. Under the Directive, reporting starts after July 2020 for arrangements dating from 25 June 2018. On 8 May 2020 the EU Commission proposed a delay of up to three months in the commencement of reporting, due to the disruption caused by coronavirus.

RSM can help you navigate DAC6 and prepare you for the upcoming changes. Download our guide to understand the reporting requirements and how international transactions and arrangements must be reported to tax authorities in future.