Optional deferral of the EU Mandatory Disclosure Directive reporting obligations
On 24 June 2020, the Council of the European Union (the Council) adopted an amendment to the Mandatory Disclosure Directive ((Directive (EU) 2018/855) the Directive) allowing EU Member States an option to defer by up to six months the time limits for the filing and exchange of the reportable arrangements. The Luxembourg and Belgian authorities already announced to opt for deferral. The Dutch authorities have not yet published a response.
On 25 May 2018, the Council adopted the Directive, also known as DAC6. DAC6 introduces mandatory disclosure rules for EU-linked intermediaries and – under certain circumstances – taxpayers.
Arrangements of which the first step is implemented between 25 June 2018 and 1 July 2020 must be reported between 1 July and 31 August 2020. From 1 July 2020 onwards, reporting is required within 30 days beginning:
- on the day after the reportable cross-border arrangement is made available for implementation; or
- on the day after the reportable cross-border arrangement is ready for implementation; or
- when the first step in the implementation of the reportable cross-border arrangement has been made, whichever occurs first. Where an intermediary is exempt from reporting to the tax authorities, he must notify other intermediaries (and, possibly, also his client). Similar (and sometimes shorter) deadlines apply to an obligation to provide notifications under the Directive.
Based on the recent amendment of the Directive, EU Member States have the option to defer these deadlines
Optional deferral of the reporting and notification deadlines
If the optional deferral is implemented in the national legislation of an EU Member State, such implementation results in the following deadlines:
- The reportable cross-border arrangements of which the first step is implemented between 25 June 2018 and 1 July 2020 have to 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:
- Reportable cross-border arrangements 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;
- 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 a reportable cross-border arrangement 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.
The amended Directive also provides the possibility, under strict conditions, for the Council to extend the deferral period once, for a maximum of three further months.
The position of Luxembourg, Belgium and the Netherlands
At this stage, it is uncertain which EU Member States will implement the optional deferral of the reporting deadlines. The Luxembourg authorities already announced the intention to opt for deferral on their website. Also, the Belgium authorities announced that they would apply a six-month deferral for federal taxes and regional taxes for which the Belgian tax administration is responsible. The Dutch authorities have not yet published a response.
Willem BonPartner Tax Adviser
Willem Bon, partner, is a member of the Tax Practice Group in our Luxembourg office. He focuses on cross-border tax issues, advising mainly multinational enterprises, investment funds, as well as wealthy individuals and families.T: +352 466 230 214 E: [email protected]