Germany will not defer mandatory reporting under DAC6

Thursday, 09 July 2020
Germany has unexpectedly decided not to extend the Council Directive (EU) 2018/822 (DAC6) deadlines for disclosure of cross-border tax planning arrangements.
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Under the original DAC6 timetable, EU Member States were required to put the reporting regime in place by 1 July 2020, requiring taxpayers and intermediaries to disclose cross-border arrangements active at that date to their national tax authorities. However, in May, the coronavirus crisis prompted the European Commission to propose a deferral of at least three months, and possibly six. This proposal was duly adopted by the EU Council of Ministers, with Member States being given the choice to defer, and for how long. The amended Directive was adopted and came into force on 27 June 2020.

Most Member States, under pressure from their financial industries, rapidly announced they would take advantage of the respite. On this basis, reportable arrangements implemented during the transitional period (the two years before July 2020) would have to be reported by 28 February 2021, instead of 31 August 2020. For new arrangements where the event triggering the reporting obligation occurs between 1 July 2020 and 31 December 2020, the 30-day reporting deadline would not occur before 1 January 2021.

So far, 21 Member States have already announced they will take up the option of deferring implementation, with only Austria and Finland definitely stating that they would stick to the original schedule. Now Germany's Federal Ministry of Finance has also announced it will not postpone, so that from 1 July 2020 onwards, arrangements must be reported within the 30-day period. The deadline remains 31 August 2020 for arrangements implemented in the transitional period.

The decision is surprising, said Emma Moesle, Tax Advisor at PwC Germany. 'Since the beginning of these discussions, statements from politicians and the public administration had left no doubt that Germany would follow the regulation agreed at EU level', she said. 'In order to ensure the rapid implementation of the changes, the legislator had even included an authorisation in the Corona Tax Assistance Act allowing the Federal Ministry of Finance to implement the provisions of EU law by means of a circular'.

A new Ministry of Finance circular on the application of the reporting obligation for cross-border tax arrangements is currently undergoing its final approval, says PwC, and it is likely to be published this month (July 2020).

Sources

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