The latest amendments to the directive on administrative cooperation in the field of taxation (DAC 6), which introduce mandatory disclosure requirements for tax intermediaries, have been formally adopted by the Economic and Financial Affairs Council (ECOFIN).
The publication of the Directive the Official Journal of the EU is expected shortly. The importance of this is that these new mandatory disclosure rules will enter into force twenty days after the publication in the Official Journal, therefore most likely in June 2018.
Transposition in Luxembourg
Luxembourg, like any other member states, is required to adopt and publish the laws, regulations and administrative provisions necessary to comply with the Directive by 31 December 2019. The provisions will be applicable from 1 July 2020.
In addition, it must also take the necessary steps to require intermediaries and relevant taxpayers to disclose information on cross-border arrangements – the first step of which was implemented between the date of entry into force of the Directive (expected June 2018), and date of application (1 July 2020) of DAC 6. Information on these reportable arrangements will have to be reported by 31 August 2020.
The speed with which the disclosure requirements have been adopted – less than 12 months from the Commission’s initial proposal – is almost unprecedented in the area of EU tax law. It will be interesting to see how Luxembourg and the other Member States will implement the new provisions into local legislation.
Several member states are considering extending the reporting obligations to domestic arrangements or to other taxes that are not covered by the EU Directive. In a recent statement published by the ECOFIN, Germany has noted that the national legal professional privilege also applies to auditors, tax advisers and chartered accountants in the same way as for lawyers. Other Member States that provide for professional legal privilege under national law are expected to follow suit. Luxembourg has not taken any position on all these points yet.
In light of the requirement to report on arrangements, the first step of which was implemented as early as the date of entry into force of the Directive, qualifying intermediaries and relevant taxpayers need to consider any adjustments to their internal processes that are required to comply with their obligations under the new rules. It remains to be seen whether Luxembourg and the other Member States will take this into account when issuing domestic guidelines.