Navigating DAC6 obligations and managing associated risks for professional services firms

January 2021

The Government has announced significant changes to the regulations for disclosing cross-border tax avoidance arrangements that took effect from 1 January 2021. In the article below we outline the changes to DAC6 and the new OECD rules, with the associated implications for both UK and international businesses.

In summary, the recent changes mean that the UK has replaced broad EU reporting rules with far narrower OECD standard reporting. However, groups with entities based in the EU will still need to ensure that those entities can comply with DAC6 reporting in their own jurisdiction and this may well require a change of internal processes if the group had previously planned to meet EU requirements by reporting through the UK.

Following the further detail linked below, if you have any questions on the continuing reporting obligation in the UK and how your firm can mitigate risks including associated penalties and reputational damage, please get in touch with your usual BDO adviser or contact our specialist, Simon Bird.


DAC6 obligations for professional services firms – preparing for the extended January 2021 deadline

July 2020

DAC6 is a new EU mandatory disclosure regime that imposes mandatory reporting of certain cross border arrangements. Here we detail the reporting requirements and the extended deadline.

Who does DAC6 apply to?

From a UK perspective, DAC 6 covers all EU taxes other than VAT, customs duties, excise duties and mandatory social security contributions. DAC6 applies to any person (including an individual, partnership, company or other legal entity) operating in the EU or with interests in the EU. So it could apply to multinational companies and also applies to intermediaries such as law firms, accountants, banks and financial advisors.

What are the full reporting requirements?

Our attached guide details the full reporting requirements and considerations professional services firms need to take. This briefing is for general advice only and how firms and financial institutions navigate the uncertainty and ensure they remain compliant with the rules, particularly at the end of the transition period, is yet another significant business issue that advisers must manage effectively.

Professional services firms should ensure they are well prepared in advance of the extended deadline of 1 January 2021 in the UK. Please contact your usual BDO representative or the specialists listed in the guide if you would like assistance.

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