EU Directive on Mandatory Disclosure Rules (MDR)/DAC6) Directive implementation
In the Netherlands, the implementation of the EU Directive on Mandatory Disclosure Rules (MDR)/DAC6) will occur on 1 January 2021, and as such is delayed due to the Covid-19 pandemic since the original implemenation date was 1 July 2020.
As of 1 January 2021, cross-border constructions that meet one or more hallmarks must be reported. You will find a list of these hallmarks in the DAC6 directive.
For a number of essential hallmarks, you only need to report the construction when the most important advantage (or 1 of the most important advantages) of the construction is the achievement of a tax advantage.
Who needs to report?
Any intermediary involved in a reportable cross-border arrangement. There are 2 exceptions to this rule. You do not need to report the reportable cross-border arrangement in the following cases:
- another intermediary has already reported the construction. And this intermediary has provided you with a reference number as proof.
- a lawyer, invoking an attorney-client privilege right.
The DAC6 guideline applies to all intermediaries. For example: tax advisers, lawyers, accountants, notaries, financial advisers, banks and trust offices. The taxpayer for whom a reportable cross-border arrangement is intended must report this himself in the following cases:
- Only an intermediary from outside the European Union is involved in the construction.
- The intermediary involved in the construction has a right of non-disclosure and does not have to report the construction.
- There is no intermediary involved in the tax construction at all.
- Not sure if someone else has already reported a potentially tax avoidance arrangement?
When do you need to report?
The DAC6 directive takes effect retroactively. Therefore, between 1 January 2021 and 28 February 2021, you must report the cross-border arrangements in which you are involved from 25 June 2018 to 1 July 2020.
Notifiable cross-border arrangements in which you are involved from 1 July 2020 to 1 January 2021 must be reported between 1 January 2021 and 31 January 2021 (the transition period).
For reportable cross-border arrangements as from 1 January 2021, the reporting period is within 30 days.
Which taxes are reportable?
inheritance and gift tax
most other taxes
VAT (sales tax)
social Security contributions
Please contact us should you have any further questions.