For many years, Governments around the world have been seeking to counter tax avoidance. Transparency is high on the global agenda. Recent years have seen the introduction of a number of tax transparency and anti-avoidance measures across the European Union (EU).
The latest measure is the EU Council Directive 2011/16 (as amended by the EU Council Directive 2018/822) in relation to cross-border tax arrangements. This directive is known as DAC6. The directive aims to bring transparency and fairness to taxation and has been in force since 25 June 2018. It should be noted that DAC6 will apply regardless of Brexit.
The directive requires EU intermediaries (including banks, accounting firms, law firms, corporate service providers and certain other persons) involved in cross-border arrangements to make a disclosure to their local tax authority, if certain requirements are met. This information is then shared with the tax authorities of the clients’ country of residence. The mandatory disclosure regime is the latest tool for tax authorities in the continuing global crackdown on perceived tax avoidance and evasion.
Taxpayers and their advisers need to devote an increasing amount of time and resources to compliance and the provision of information to tax authorities. Failure to comply with the directive can result in penalties.
For more information on DAC-6, please visit an article in the Gibraltar Magazine, which Europa Trust Company Ltd sponsors. Click the link
The full directive can be found here following the link below to the official website of the European Union
As intermediaries, Europa Trust Company Ltd is required to adhere to the directive and report where necessary.