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Dutch Mandatory Disclosure Rules for cross-border arrangements

What do the Mandatory Disclosure rules imply?
Based on the Mandatory Disclosure rules, also known as DAC6, qualifying intermediaries such as lawyers, accountants and tax advisers, as well as “in-house teams” (see below) and – under certain circumstances – taxpayers need to report certain cross-border arrangements (RCBAs) to the Dutch tax authorities.

What are the reporting deadlines?

Optional deferral of the reporting and notification deadlines

On 24 June 2020, the Council of the European Union adopted an amendment to DAC6 allowing EU Member States an option to defer by up to six months the time limits for the filing and exchange of the RCBAs.

On 26 June 2020, the Dutch tax authorities announced that they will apply a six-month deferral for the filing and exchange of the RCBAs as follows from the amended DAC6. The Dutch implementation of the optional six-month deferral results in the following deadlines:

  • The RCBAs of which the first step is implemented between 25 June 2018 and 1 July 2020 must be reported (or notified, as the case may be) before 28 February 2021.
  • The 30-day reporting period (and the related notification period) start on 1 January 2021 for:

o RCBAs being made available for implementation, being ready for implementation, or when the first step in the implementation has been made between 1 July 2020 and 31 December 2020;
o Intermediaries that have directly or indirectly provided aid, assistance or advice with respect to designing, marketing, organising, making available for implementation or managing the implementation of an RCBA between 1 July 2020 and 31 December 2020.

  • The first periodic report in respect of marketable arrangements should be submitted on 30 April 2021 at the latest.

From 1 January 2021 onwards, intermediaries or taxpayers are required to file information on the RCBAs within thirty days beginning; (i) on the day after the arrangement is made available for implementation; (ii) on the day after the arrangement is ready for implementation; or (iii) when the first step in the implementation has been made – whichever occurs first.

Original deadlines of the reporting and notification deadlines

Since the deferral of the reporting and notification deadlines is optional, differences between various EU Member States may arise. In the case an EU Member State does not apply the optional deferral intermediaries and – under certain circumstances – taxpayers, need to report all RCBAs of which the first step is implemented between 25 June 2018 and 1 July 2020 by 31 August 2020 at the latest. As a result of this retroactive effect, intermediaries and taxpayers should monitor what information they may need to disclose about arrangements that are advised and have been implemented since 25 June 2018.

From 1 July 2020 onwards, intermediaries or taxpayers are required to file information on the RCBAs within thirty days beginning; (i) on the day after the arrangement is made available for implementation; (ii) on the day after the arrangement is ready for implementation; or (iii) when the first step in the implementation has been made – whichever occurs first.


What is reportable under the Dutch legislation?

Reporting obligations

In general, the Dutch implementation follows the minimum standard of the Mandatory Disclosure Directive (no additional requirements compared to the wording of the Mandatory Disclosure Directive and no additional information needs to be reported).

A cross-border arrangement is reportable if it involves more than one EU Member State or an EU Member State and a third country and contains at least one of the hallmarks set out in the Mandatory Disclosure Directive.

In pure domestic situations and situations having no link to any EU Member State, no reporting obligations exist in the Netherlands.

Applicable taxes

The Dutch legislation applies to arrangements in the context of all taxes except for value added tax, custom duties and social security premiums.

Arrangement

The term “arrangement” is not further defined in the Dutch implementation of the Mandatory Disclosure Directive. An arrangement can consist of different elements such as a transaction, action, agreement, loan, commitment, or a combination thereof.

Hallmarks

The list of the hallmarks included in the proposal is fully in line with the list of the Mandatory Disclosure Directive.

Administrative guidance

On 30 June 2020 the Dutch Ministry of Finance published guidelines providing additional guidance in respect of the Dutch implementation of the Mandatory Disclosure Directive.

Which intermediaries have the reporting obligation?

Dutch intermediaries

The reporting obligation applies in the Netherlands to ‘Dutch’ intermediaries (individuals or legal entities) and in some cases taxpayers.

Who is considered as an intermediary in a specific case depends on all facts and circumstances?

In the case an individual adviser is employed by a firm, the firm in principle qualifies as the intermediary (‘office-approach’).

Foreign intermediaries

Foreign intermediaries without a link to the Netherlands will have no reporting obligations in the Netherlands under the Dutch implementation of the Mandatory Disclosure Directive.

In-house legal/tax teams of taxpayers

In some situations, the entity employing the in-house adviser(s) (for instance, an in-house tax or legal department) will be considered the intermediary. This is the case if an in-house adviser of a taxpayer is involved in advising an affiliated group entity on an RCBA whereas the group entity that employs the in-house adviser is not involved in the arrangement itself. The entity that employs the in-house adviser is in principle considered the intermediary and not the individual adviser.

Hence, taxpayers should be aware that they may, as an intermediary, have to disclose information on an RCBA to the Dutch tax authorities. This has the advantage that taxpayers have the possibility to report themselves and submit proof of the filing to the intermediaries involved. As a result, the other intermediaries do not have a filing obligation and the taxpayer has better control over the information that is reported.

Which taxpayers have the reporting obligation?

No intermediary

Fully in line with the Mandatory Disclosure Directive, in cases where no intermediary is involved (i.e. the arrangement is fully developed in-house), when the intermediary involved does not have a link to an EU Member State or in the case of legal professional privilege under Dutch law (e.g. Dutch lawyers and civil-law notaries), the obligation to report lies with the taxpayer.

Exempt intermediary

If an intermediary is exempt from filing information on an RCBA because of its legal professional privilege, the intermediary must immediately notify other intermediaries involved or, if there are no other intermediaries involved the taxpayer, that the other intermediaries or the taxpayer will have a reporting obligation.

In-house legal/tax teams of taxpayers

In some situations, the entity employing the in-house adviser(s) (for instance, an in-house tax or legal department) will be considered the intermediary. For more information, please see the column left to this column: “Which intermediaries have the reporting obligation?”.

If you would like to find out more, or should you have any questions, please feel free to get in touch with your trusted adviser at Loyens & Loeff or send an email to info@loyensloeff.com.

For our Mandatory Disclosure (DAC6) brochure click here.

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