DAC6 lesson: what may seem a formality … actually it isn’t! Six weeks ago, the proposed 3+3 month deferral seemed almost a sure thing, due to the latest Corona restrictions. After all, it was the European Commission that initially wanted this directive, so if the Commission was fine with such a minor (?) change, why not go with it? Alas,  with no final resolution in sight re the aforementioned deferral of the aforementioned Directive, we are left wondering:  what really is at stake here?

A week ago, Greenland was made news that went rather unnoticed, possibly in the safe knowledge that it is somehow linked to the new normal – the island saw, in one day, the melting of 12.5 billion tons of ice! If we are into comparisons, we look at an amount big enough to get the state of Florida covered under 12 cm thick water layer or the whole of Denmark submerged under a half of meter water blanket. But I think no one is really into this kind of comparisons and let us therefore leave them breezily to tomorrow’s generation (such a fast ice melt was only supposed to occur 50 years from now anyway!)

It’s easy to castigate politicians for their fiery speeches. On Tuesday (16 July 2019), Outgoing President of the European Council, Donald Tusk, tweeted to inform us that ”I am a fanatic of EU’s unity, (...) When she [Ursula von der Leyen] says that she will be a passionate fighter for Europe's unity and strength, she means it”. A couple of hours later, Mrs von der Leyen, running for president of the European Commission, would become as passionate to convince sceptical MEPs: ” Anyone that is with me in wanting to see Europe grow stronger and to flourish and blossom can count on me as a fervent supporter”. An ardency which was reported by the leading news agencies, which, as a matter of detail, is not to be found in the original version of the speech. 

Getting through to a taxpayer via its tax advisor is no new policy. It first started 20 years ago in the US and moved on to the UK placing intermediaries under an obligation to report the so-called tax avoidance schemes. The EU is now joining the club with an unpredictable experiment enforcing common minimal standards in reporting ”potentially aggressive tax arrangements”. An experiment which is unpredictable primarily for multinational groups of enterprises to be faced with interpretations of 27 (28, because, despite BREXIT, UK seems to be in this game) jurisdictions which are still different from each other in terms of direct taxes.

In preparing the unavoidable moment of DAC6 becoming enforceable, this TPS paper sets out to bring together some of the myriads of questions and ambiguities, and some of the few certainties related to the new obligations, based on materials issued so far by the European Commission and other Member States. An experiment which is unpredictable primarily for multinational groups of enterprises to be faced with interpretations of 27 (28) jurisdictions which are still different from each other in terms of direct taxes. In preparing the unavoidable moment of DAC6 becoming enforceable in other jurisdictions as well, this paper sets out to bring together some of the myriads of questions and ambiguities, and some of the few certainties related to the new obligations, based on materials issued so far by the European Commission and other Member States.

Keywords: DAC6, hallmarks, cross border arrangements, tax intermediaries, directive, transfer pricing.

The French Senate made up its mind (see link). Tired of waiting for a global consensus on the digital advertising tax, which had been repeatedly delayed, the French officials decided unilaterally to introduce a 3% tax on the revenues that digital companies earn from French users.