EU DAC6 - Mandatory Disclosure of Reportable Cross-Border Arrangements
Directive 2018/822 (DAC6) is an EU Directive requiring EU intermediaries or taxpayers to report information on certain cross-border arrangements to their local tax authorities. Our previous client updates in relation to DAC6 can be found on our website here1 and here2.
Practical Implications for Irish Intermediaries and Taxpayers
1. Irish intermediaries will no longer be able to rely on reporting by UK intermediaries.
From a practical perspective, in our experience many Irish funds and other investment structure entities may have been considering having a UK based AIFM, legal or tax advisor or investment manager act as primary reporting intermediary for DAC6 where a reporting obligation arose. This approach will now need to be reconsidered.
2. DAC6 reporting obligations may default to Irish taxpayers.
The EU DAC6 rules also provide that where there is no intermediary, the reporting obligation under DAC6 falls on the taxpayer. Where an Irish taxpayer is serviced or advised by a UK intermediary only, and no other intermediary, the Irish taxpayer may need to file a DAC6 return in relation to any reportable cross-border arrangements that it has been involved in. The Irish taxpayer will need to consider whether it is capable of making such filings through the Revenue Online System.
It is important that taxpayers manage DAC6 appropriately in order, for example, to avoid having multiple reports made of the same transaction (potentially in more than one jurisdiction), to monitor the number of reports being made and to avoid a situation where reports are wrongly made by intermediaries. This new change in the UK may impact the management of the DAC6 process by a taxpayer and will need to be considered carefully.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.