On 13 March 2018 the ECOFIN Council (composed of the EU-28 Finance Ministers) reached political agreement on a Council Directive amending Directive on administrative cooperation in the field of taxation (commonly referred to as DAC) as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (RCBAs) in order to disclose potentially aggressive tax planning arrangements (commonly referred to as DAC6).

The main purpose of DAC6 is to strengthen tax transparency and fight against aggressive tax planning.  The term aggressive tax planning is undefined, however, and instead, reference is made to a number of pre-determined hallmarks, which are features that could render a cross-border arrangement reportable under this Directive. DAC6 provides for mandatory disclosure of RCBAs by intermediaries, or individual or corporate taxpayers, to the tax authorities and mandates automatic exchange of this information among EU Member States.

DAC6 will now be submitted for formal adoption at a forthcoming ECOFIN Council meeting, it will enter into force on the 20th day following the date of its publication in the Official Journal of the EU (this could be within the next few months) and the first RCBAs will be those where the first implementation step occurs between that date and 1 July 2020 (with reporting of such by 31 August 2020).  For RCBAs as from 1 July 2020 reporting is to be made within 30 days of the relevant date (which will generally be the earlier of; (i) when the RCBA is made available for implementation, or (ii) is ready for implementation, or (iii) when the first implementation step occurs).

EU Member States must transpose DAC6 into their national laws and regulations by 31 December 2019.  The first automatic exchange of information should be communicated among EU Member States by 31 October 2020.

For more information, click here: PwC EUDTG Newsalert – 13 March 2018 (ECOFIN Council’s political agreement on mandatory disclosure rules for intermediaries)