On 11 August 2020, Legislative Decree no. 100 of 30 July 2020 (effective from 26 August 2020) has been published in the Official Gazette (the "Decree"). The Decree implemented Council Directive (EU) 2018/822 of 25 May 2018 regarding mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements ("DAC 6").

The entry into force of the Decree is the culmination of a series of international initiatives to raise the level of tax transparency, and is aimed to combat aggressing tax planning considering that tax planning structures have evolved and become particularly sophisticated making it increasingly difficult for Member States to protect themselves against domestic tax base erosion. In particular, the legislative instrument implemented by the Decree shall allow Italy to be able to report relevant information, communicated by taxpayers and intermediaries, with tax authorities of other Member States in order to examine those cross-border arrangements potentially constituting aggressive tax planning.

DAC 6 – representing the sixth modification to the applicable legislation on the automatic exchange of information – had to be initially brought into the domestic legislation of Member States by 31 December 2019 and to be fully applied from 1 July 2020.

However, as a result of the Covid-19 emergency, the Council of the EU adopted Directive (EU) 2020/876 of 24 June 2020 allowing Member States to defer by up to six months the time limits for the filing and exchange of information under the EU mandatory disclosure rules. Indeed, the severe risks to public health and other hindrances caused by the Covid-19 pandemic, as well as lockdown measures imposed by Member States to help contain the pandemic, have had a significant disruptive effect on the capacity of businesses and Member State's tax authorities to carry out some of their obligations.

As a result of the deferral, taxpayers and intermediaries shall report cross-border arrangements implemented between 30 June and 31 December 2020 within 31 January 2021. Cross-border arrangements the first step of which was implemented from 25 June 2018 to 30 June 2020 shall be reported by 28 February 2021.

Should Member States adopt new containment measures for public health risks pending the deferral period, the Commission may further extend the deadlines for reporting and exchange of information by up to three months.

Originally published 26/10/2020

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