Directive DAC6, which regulates cooperation between tax administrations in the exchange of information in the European Union, obliges companies to provide information to the Tax and Customs Board about aggressive tax planning schemes. This only applies to schemes that are cross-border in nature and affect tax liabilities, the sharing of financial account information, or the concealment of beneficial ownership. However, how do you know if this applies to your company?
First, all schemes that have been developed, marketed, organized, made available, and managed, as well as assisted and advised, should be described. It should then be verified whether the scheme fulfills at least one of the following international conditions:
1. Scheme participants are residents of different countries or jurisdictions;
2. at least one of the persons participating in the scheme is simultaneously resident in more than one country or jurisdiction;
3. at least one of the participants in the scheme works in a country or jurisdiction in which he is not a resident.
If at least one of these criteria is met, it is also necessary to establish compliance with other criterias established by the regulation of the Minister of Finance "Criteria for cross-border schemes".
Not all schemes are suitable for fulfilling the obligation to exchange information. Therefore, the next step should be to check whether the primary benefit criterion of receiving a tax benefit is met. The main benefit criterion is also considered to be met if, taking into account all relevant circumstances, there is a reasonably foreseeable main benefit or is one of the main benefits deriving from the scheme.
If all of the above criteria are met, the exchange of information is mandatory. If the company has the characteristics but the main benefit criterion is not met, it must be ensured that the other party to the scheme that receives the tax advantage has notified its home country of the scheme. In this case, the company is exempted from the obligation to re-report, but it must provide a reference number already assigned to the submitted scheme, or other evidence of the provision of the same information by another person.
Contact our specialists to elaborate DAC6 implementation in your business.