Deferral of DAC6 regime: UK on board

The Directive on Administrative Cooperation, or DAC6 as it is commonly known, has been causing a number of headaches in the tax world. The Covid-19 pandemic has placed added pressure on tax authorities, intermediaries and taxpayers alike to be ready for the approaching reporting deadlines.

As a result of this disruption, the European Commission agreed to defer DAC6 reporting deadlines by six months. This was on an optional basis and the right to exercise this option rests with Member States.

HMRC has today confirmed that the UK will defer the reporting regime accordingly. Despite the six months’ respite, DAC6 is very much here to stay. Anyone in the process of developing their compliance approach should see this as a welcome extension rather than a call to down tools.

The amended directive also provides for the Council of the EU, under strict conditions, to extend the deferral period once more, for a maximum of three further months.

Revised deadlines

1.  Historic arrangements: (Arrangements effective from 25 June 2018 to 30 June 2020): The reporting deadline has been extended from 31 August 2020 to 28 February 2021.
2.  “Delayed Period” arrangements: (Arrangements that become reportable between 1 July 2020 and 31 December 2020): To be reported by 31 January 2021.
3.  Ongoing arrangements: The rolling 30 day reporting requirement to commence from 1 January 2021.
4.  The first quarterly exchange of information between Member States: The initial date set for the first exchange of reports submitted under DAC6 was 31 October 2020. The deferral means that Member States who defer will not exchange information until 30 April 2021.

Our timeline illustrates both the original (in red) and deferred (in black) reporting deadlines.