Rumours about a delay to the DAC6 filing dates have been tantalisingly rumbling on for a while now, as the commencement date of 1 July 2020 looms closer. With many practical questions still unanswered, the tools for submitting reports yet to be made available in a number of jurisdictions and COVID-19 making timely compliance more difficult, the EU Council has agreed an amendment to the DAC to give Member States (and this term must currently be read as including the UK given that we are still in the Brexit transition period) an option to defer the filing dates by up to six months. The amended directive provides that the deferral period may, under strict conditions, even be extended once more by a further three months, depending on the evolution of the pandemic.
This delay will give tax authorities time to finalise guidance and IT systems and enable intermediaries and taxpayers to consider the impact of that guidance on their DAC6 compliance procedures. To date, the UK, Belgium and Luxembourg have announced a six month delay. Ireland has announced a delay with details to follow and Finland has announced it is not opting for deferral at all. More announcements are expected to follow.
HMRC has issued guidance to confirm that the UK Government is deferring the first DAC6 reporting deadlines. Consequently, the IT system for reporting will not be switched on until a later date.
A slight wrinkle may be that, in order to defer the reporting deadlines, the UK regulations implementing DAC6 will have to be amended – and it is unlikely that this amendment will be made before 1 July 2020 when the regulations come into force. So, for a period, intermediaries and taxpayers in the UK may be in position where they have a reporting obligation with which it is physically impossible to comply! The solution is a statement in the guidance that no action will be taken for non-reporting between the period of 1 July and the date on which the amendment is eventually made.
The table shows the effect of the delay on the UK’s reporting dates:
|Original date||Revised date|
|Look-back period reporting||31 August 2020||28 February 2021|
|Commencement of the 30-day period for the reporting of cross-border arrangements where the reporting trigger was reached between 1 July 2020 and 31 December 2020||1 July 2020||1 January 2021|
|First exchange of information between tax authorities||31 October 2020||30 April 2021|
|First of periodic reports in relation to marketable arrangements||31 October 2020||30 April 2021|
The new filing dates (and the new date for the first the exchange of information between tax authorities) are now after the end of the Brexit transition period (currently 31 December 2020). Although HMRC has indicated that DAC6 is here to stay, we already know that the UK regulations will need some amendment for them to work post-transition period and it will be interesting to see how exchange of information between the UK and other tax authorities will be resolved when the UK is no longer treated as a Member State.
HMRC guidance is expected to be published shortly which should help businesses prepare to meet their reporting obligations.