Commission proposes postponement of taxation rules due to Coronavirus crisis

On 14 May 2020, we already informed about a proposal by the European Commission to postpone the original deadline for DAC 6 notification due to the restrictions during the COVID-19 pandemic. The Luxembourg Ministry of Finance endorsed this proposal in a publication of 4 June 2020 and looked forward to the final decision of the European Council.

On 19 June 2020, the European Council, after a consultation with the Member States of the European Union, published an amendment to the DAC 6 Directive 2011/16/EU (https://data.consilium.europa.eu/doc/document/ST-8498-2020-INIT/en/pdf). This gives Member States the possibility to extend the deadline for the reporting obligation by up to six months.

We are now looking forward to the final amendment to the reporting obligations under the law of 25 March 2020 in Luxembourg.

European Union postpones deadline for “DAC 6”

May 14, 2020

In GENERAL, EU, LUXEMBOURG, Regulations, TAX

By AIQUNITED

With its proposal of 8 May 2020 (“Proposal”), the European Commission (“EC”) suggested to postpone the original DAC 6 reporting timeline in recognition of the impact of COVID-19 on the performance of businesses and European Member States.

Background:

As announced in our newsletter dated 28 January 2019, Directive 2018/822/EU (generally referred to as “DAC 6”) and amending Directive 2011/16/EU is an EU anti-tax avoidance measure that requires intermediaries and ultimately taxpayers across the EU to report information in relation to certain reportable cross-border arrangements to their local tax authorities. DAC 6 was implemented by the Luxembourg law of 25 March 2020 and the German law of 21 December 2019. An overview of the regulations under DAC 6 can be found in our newsletter at https://aiqunited.com/en/aenderungsrichtlinie-2018-822-eu-dac-6-in-luxemburg/.

Proposal:

In its Proposal, the EC is recommending a three-month postponement – with the ability to extend the postponement by an additional three months – to various reporting requirements. In particular, the following postponements are proposed for DAC 6:

• 1 July 2020:
  DAC 6 law will enter into force as from 1 July 2020.
• 1 October 2020:
  The beginning of the period of 30 days for reporting reportable cross-border arrangements implemented after 1 July 2020 will be postponed from 1 July 2020 to
  1 October 2020.
• 30 November 2020:
  The date for reporting cross-border arrangements that became reportable from 25 June 2018 to 30 June 2020 will be postponed from 31 August 2020 to
  30 November 2020.
• 31 January 2021:
  The date for the first exchange of information on reportable cross-border arrangements between European Member States will be postponed from 31 October 2020 to 31 January 2021.

Neither the Luxembourg nor the German legislator has commented on the EC Proposal or the postponement of its local DAC 6 deadlines. We will keep you updated.