Pandemic Postpones DAC6 Reporting

It has been confirmed by HM Revenue and Customs (HMRC) that a measure which requires solicitors to report cross-border transactions to the authorities has been delayed by six months.

The  delay in the implementation of the Council Directive (EU) 2018/822 (DAC6) on compulsory reporting of cross-border tax arrangements has come as a result of an amendment being passed by the EU allowing member states to defer reporting as a result of the coronavirus pandemic.

DAC6 requires intermediaries to report any cross-border arrangements that gave rise to a tax advantage within a certain time schedule. It has been criticised as being too broad, routinely catching benign or commercial arrangements with no tax motive.

The amendments will not be carried through by 1 July, HMRC is not expecting any reports to be made in July, and will not take any action for non-reporting during any period between 1 July and the date that the amended regulations come into force.

HMRC is expected to publish wider DAC 6 guidance shortly.

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