The (compliance) virus also spreads

What is DAC6?

The European Directive 2018/822 (also known as 'DAC 6') was published on 5 June 2018. The directive provides for a mandatory exchange of information on 'potentially aggressive tax planning techniques of a cross-border nature'. The directive has remained somewhat below the radar because such a directive always has to be transposed first by the national legislator. This was done by a law of 20 December 2019. 

DAC 6 aims at a mandatory automatic exchange of information in the tax field regarding certain cross-border arrangements in order for each national tax administration to be able to react adequately to tax planning. However, such exchange is only possible if the information is available to the authorities. It is here that your adviser and your company will be subject to additional obligations.

What should one report?

Although in principle the aim is only cross-border constructions for which 'an indication of a risk of tax avoidance' is present, the legislator has tried to make the loopholes as small as possible. In order to make this possible, concepts are defined as broadly as possible. A list of characteristics that could be a strong indication of tax avoidance is used. The aim is therefore to identify perfectly legal ideas that could potentially lead to tax avoidance and therefore have a negative impact on tax revenue. 

Who should report?

In main order, the obligation is apparently imposed on your adviser. The reporting obligation rests on the 'intermediaries' who have a link with one of the Member States. However, if there is no intermediary present or if he is prevented from reporting by his professional secrecy, this obligation will very quickly be shifted to the 'relevant taxpayer', i.e. the person for whom the construction in question is intended. It is therefore certainly possible that you, your company or another group company itself will be subject to the new reporting obligation.

In addition, it is very useful for you as an entrepreneur to know what information is involved and when it may be communicated to the tax authorities.

How and when to report?

In order to comply with this reporting obligation, a (rather technical) analysis of the alleged construction and whether or not it is covered by the obligation must always be carried out first. If this is the case, one only has 30 calendar days to do the necessary as soon as the idea can be implemented or is being implemented.

For the first notification of new constructions (first step of implementation or idea implementable from 1 July 2020) your consultant or yourself still has time (thanks to a postponement due to corona) until 30 January 2021.

Does this also apply to the past?

But know that you must also look to the past. After all, all arrangements implemented from 25 June 2018 to the present must also be reported. There is still time until 28 February 2021 to report these historical arrangements. 

What if it is not reported?

In the event of incomplete information or late or non-reporting, fines of up to EUR 100,000 per violation may be imposed.

Moore law can assist you

First of all, you will find additional information in our FAQ.

But please know that we can assist you in determining whether you are subject to an obligation to report and how this can best be fulfilled. We can even prepare and submit such a notification for you. To this end, we can, together with you, analyse and assess the most important transactions as from 25 June 2018 on the basis of the conditions set by the Belgian legislator. 

If you are interested in this possibility, you can contact your regular contact at Moore Law or contact the person responsible for DAC 6 reporting: Alain Claes.     

Don't hesitate to contact us if you have any questions about this.