EU Commission Proposes Deferral of DAC6 Reporting Deadlines

21/05/2020

As a response to the hurdles caused by the restrictions imposed in relation to COVID-19, the European Commission (EC) published a press release on 8 May 2020 proposing a deferral of the reporting deadlines under the EU Directive on Administrative Cooperation (known as DAC 6) by three months.

The proposal includes the following:

• reportable cross border arrangements where the first step was implemented between 25 June 2018 and 30 June 2020 (known as “historical arrangements”) would be reportable by 30 November 2020 instead of 31 August 2020;
• arrangements where the reporting requirement is triggered between 1 July 2020 and 30 September 2020 would be reportable by 31 October 2020;
• the 30 day reporting requirement would start on 1 October 2020 instead of 1 July 2020; and
• the date for the first exchange of information on arrangements would change from 31 October 2020 to 31 January 2021.

The EC has made it clear that the rules will come into force as planned on 1 July 2020 and this is simply a deferral. What this means in practice is that all transactions which should have been reported will still need reporting, albeit at a later date. 

The EC proposes to have the power to defer the deadline by a further period of three months, only in case the exceptional circumstances in relation to the pandemic persist.

The proposal needs to be approved from the Economic and Financial Affairs Council (Ecofin) and the European Parliament before it can take effect. The three months’ extension provided by the proposal is a maximum period, therefore Member States have the discretion to allow a shorter deferral period. Yet, such capacity seems to be only theoretical, especially considering that some Member States are supporting that there should be an outright extension of six months.