DAC6: Mandatory Disclosure Tax Reporting

DAC6

The sixth version of the EU Directive on administrative cooperation (DAC6) requires professionals to implement renewed levels of tax diligence on cross-border arrangements. The new legislation represents one of the most significant changes for professionals within the taxation field in recent years.

On 17th December 2019, the Maltese Government published the ‘Cooperation with Other Jurisdictions on Tax Matters (Amendment) Regulations (2019)’ enforcing the DAC6 locally.  The Regulations will apply from 1st July 2020. All relevant cross-border arrangements implemented from 25th June 2018 will need to be reported.

Reporting obligations will fall upon EU intermediaries (typically including tax consultants, lawyers, banks, and corporate service providers) to provide tax authorities with additional information relating to certain cross-border tax-arrangements. When no intermediary is required to make a filing, the mandatory reporting requirements will fall onto the individual taxpayer.

Some of the other new changes include:

  • The exchange of information for targeted tax arrangements will be required to be submitted automatically, as opposed to spontaneous or upon request as before.
  • Penalties of up to 30,000 EUR and a term of imprisonment of up to 2 years for non-compliance.
  • Explicitly listed hallmarks to determine which cross-border arrangement are reportable (Annex IV).
  • Exemptions for specific categories of intermediaries who are protected by legal professional privilege are permitted, to the extent, it is provided under the local relevant legislation.
  • The DAC6 applies to all taxes levied, with the exception of value-added tax, custom duties, and compulsory social security contributions payable. Corporate tax, individual tax, and inheritance tax will, therefore, all fall within the remit of DAC6’s reporting obligations

How can PKF Malta help you?

PKF Malta are experts in tax compliance and are continually following the latest developments in the field. We can help you understand your DAC6 reporting obligations and assist you in implementing an effective strategy to ensure compliance.

Contact us

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