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 is reportable under the Dutch legislation?
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.
The Dutch legislation applies to arrangements in the context of all taxes except for value added tax, custom duties and social security premiums.
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.
The list of the hallmarks included in the proposal is fully in line with the list of the Mandatory Disclosure Directive.
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?
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 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?
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.
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?”.