Hendrik-Jan van Duijn
In an international group transaction, the question is whether a DAC6 report to the Dutch Tax Authorities is obliged.
The Council of the European Union adopted on May 25, 2018 the Directive 2018/822 on Mandatory Disclosure. Due to the obstacles caused by the Corona pandemic, the reporting obligation came into force on January 1, 2021 instead of July 1, 2020.
Mandatory Disclosure Rules (MDR), also called DAC6 regulation, require intermediaries to report potentially aggressive international tax arrangements to the tax authorities once a transaction is executed after June 25, 2018.
We will highlight the following topics:
- DAC6 Directive implementation in the Netherlands
- DAC6 Reporting obligation
- DAC6 Hallmarks
- Main benefit test in The Netherlands
DAC6 Directive implementation in the Netherlands
The mandatory disclosure rules (MDR) require intermediaries to report cross-border transactions that can be used to evade tax to the Tax Authorities.
Cross-border constructions that meet one or more Hallmarks must be reported. In a number of cases, the obligation applies only if the main benefit test is passed. The mandatory disclosure rules apply to all types of tax, except VAT, customs duties, excise duties, fees and social insurance contributions. In the case of non-compliance, the fine may be up to EUR 870,000.
DAC6 Reporting obligation
The obligation to report is primarily placed with the intermediary. An intermediary is a person who devises, offers, sets up, makes available for implementation or manages its implementation. This includes, for example, tax advisors, lawyers, accountants, notaries, financial advisers, banks and trust firms.
If no intermediary is involved, the intermediaries concerned have a privilege or if the taxable person himself has devised and implemented the structure, the reporting obligation shifts from the intermediary to the taxable person.
Once the transaction takes place, the intermediary, or the taxpayer, has 30 days to notify the transaction (DAC6 deadline).
The directive includes a list of Hallmarks. This list is divided into five categories. Cross-border transactions should only be reported if one or more of the Hallmarks are met. Some transactions are only required to report if the main benefit test has also been met.
Main benefit test in The Netherlands
Certain transactions need only to be reported if they also comply with the so-called main benefit test. This test is met if it can be demonstrated that the main advantage or one of the main advantages that is reasonably foreseeable from a transaction, in view of all the relevant facts and circumstances, is to obtain a tax advantage.
In order to answer the question of whether there is a potentially aggressive tax transaction and thus a reporting obligation arises, we have drawn up a roadmap. For analysis and reporting you are here at the right place. We have now made more than 50 DAC 6 analyses, and we can help you with your DAC 6 obligations.
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