Focus on DAC6
The DAC6/EU Mandatory Disclosure Rules (EUMDR) relate to “reportable cross border arrangements” in the UK and in EU member states, which must be disclosed to HMRC and impact relevant:
- intermediaries acting as a “promoter”
- intermediaries acting purely as an “adviser” or “service provider”
HMRC description on DAC6:
“The regulations will require taxpayers and their advisers to report details of certain types of cross-border arrangement to HMRC. An arrangement will be reportable if it contains certain characteristics, known as hallmarks. Being reportable will not mean that an arrangement is used for tax noncompliance. However, these hallmarks are characteristics which are commonly seen in arrangements that could be used to avoid or evade tax.”
The DAC6 Regulations have been laid before the House of Commons under the formal name “International Tax Enforcement (Disclosable Arrangements) Regulations 2020, Statutory Instrument 2020 No. 25.
Some good news is that from a UK perspective DAC6 does not apply to VAT, Customs Duties, Excise Duties or compulsory Social Security Contributions. It should be noted that the EUMDR directive has not been adopted consistently in member states. In Poland for example indirect taxes are included in their local regulations.
Read our key overview of DAC6 based on changes made by HM Revenue & Customs announced as at January 2021.