DAC6 – How have the rules changed since leaving the EU?

DAC6 is a system of mandatory reporting of cross-border tax arrangements, where these affect one or more EU member states and fall into one or more particular characteristics (hallmarks).

Following the UK leaving the EU, DAC6 will no longer be applied in its entirety. It is being replaced by OECD rules, the main difference being, arrangements that still need to be reported under DAC6 are restricted to any that fall into Category D of Part II of the rules.

These hallmarks cover:

• Arrangements which have the effect of undermining reporting requirements under agreements for the automatic exchange of information.
• Arrangements which obscure beneficial ownership and involve the use of offshore entities and structures with no real substance.

In order to move across to International from EU standards, as soon as it is practical the government will repeal the existing legislation on how DAC6 affects your business. They will then implement DAC6 in the UK and introduce the OECD’s Mandatory Disclosure Regime (MDR).

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