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Mandatory tax disclosure – DAC6

On 1 July 2020, the International Tax Enforcement (Disclosable Arrangements) Regulations 2020, often referred to as DAC6, came into force in the UK. It requires the disclosure to HMRC of cross-border arrangements that meet certain hallmarks or criteria. Intermediaries with an EU nexus have the primary obligation to report, but where there is no reportable intermediary the obligation falls on the taxpayer.

However, on 31 December 2020, following the cessation of the Brexit transition period, HMRC repealed all reporting requirements for UK entities except for Category D Hallmarks. The reporting requirements in EU countries remain unchanged.

In the UK, the only disclosure that will now be required under the Hallmarks is:

Category D – Hallmarks concerning automatic exchange of information and beneficial ownership (which must be interpreted in accordance with the Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures approved by the OECD on 8 March 2018). 

There is no change to the reporting deadlines which were:

Arrangements between 25 June 2018 and 30 June 2020 – 28 February 2021.

Arrangements between 1 July 2020 and 31 December 2020 – 31 January 2021.

From 1 January 2021, all reportable arrangements must be reported within 30 days. 

During 2021, HMRC will hold a consultation on international tax mandatory reporting and this will be followed by tabling new legislation aimed at implementing the OECD’s Mandatory Disclosure Rules (MDR).

We can help you understand the changing regulations and guidance – and the interaction with other EU countries, some of which have different reporting deadlines.

The 30-day reporting obligation will put pressure on companies to identify arrangements, collect the relevant data and ensure proper reporting. We will invest the time to guide you and assist you in establishing a reporting strategy and process.  process.