DAC6 imposes mandatory reporting of cross-border arrangements affecting at least one EU Member State that fall within one of a number of “hallmarks”.

Which taxpayers need to comply?

All MNEs with business operations in the EU must comply with DAC6. This applies irrespective of where the MNE is headquartered (US HQ MNE which have entities in any of the EU countries will need to comply). Also, there are no minimum thresholds before DAC6 reporting applies and no safe harbor exceptions.

Similarly, any intermediary (e.g. tax advisory firm) that is registered to do business in the EU will need to comply with DAC6 reporting requirements.

DAC6 is not just about aggressive tax planning. The Directive has been drafted as such that it also applies to standard transactions with no particular tax motive. This means that ordinary transactions such as cross-border leasing, intercompany royalty payments, securitization structures, certain types of reinsurance and many standard group corporate funding structures may be reportable.

Severe penalties could apply to failure to comply with DAC6. The Netherlands for example has proposed penalties as much as EUR 830,000.

DAC6 / MDR Timeline

DAC6 in force (*transactions now reportable*)
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June 25, 2018
Domestic implementation
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December 25, 2019
Domestic regimes effective
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July 1, 2020
First reports due
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August 31, 2020
First exchange of information
October 31, 2020

Orbitax has responded with the DAC6 Reporter solution, which includes:

A comprehensive library written in an FAQ format that lists all the DAC 6 requirements for each country, from identifying reportable arrangements to rules on who needs to report and when. The library will also include the specific DAC6 implementation rules for each country, with English translations, and will highlight the differences in each country's implementation as compared to the DAC6 Directive, Council Directive (EU) 2018/822 of 25 May 2018.

Several tools to capture both reportable arrangements and associated cross-border transactions. The tools will enable users to directly upload transactions (that could be previously downloaded from an ERP system) and will apply logic to automatically flag transactions that may need to be reported under DAC6. A data survey tool can then be used to collect additional information, which includes surveying both in-house stakeholders and outside advisors to list reportable arrangements and confirm that all the transactions that are connected to reportable arrangements have been captured. A final piece of logic will then be applied to combine arrangements and transactions and separate them between those that will be reported by an intermediary and those that need to be reported by the taxpayer.

A Due Date Tracker that lists out all the upcoming due dates for filing country specific DAC6 reporting forms. Each due date can in turn generate a series of workflows involving various stakeholders who can be assigned tasks and completion dates with set alerts delivered directly to their email inbox.

A forms tool that auto-populates editable versions of the DAC6 reporting forms with prefilled data and enables collaboration among stakeholders (including tax advisors) via data survey or chat to complete missing fields. Completed forms will then be converted into the required filing format based on local country specifications (XML, etc.). Users can then file these forms with the local country tax authorities (usually by uploading the file via a government website). All data from a filed form is reused where relevant to easily complete subsequent filings.

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The DAC6 Reporter includes the following tax workflow tools...

Dashboard

Get an overview of various data elements being maintained on the Orbitax platform, including your countries/entities that have upcoming effective tax law changes, compliance due dates for the next quarter and more.

Newsletter

Receive a daily digest newsletter straight to your email inbox each morning, with the latest tax news, law changes, due dates and more affecting your footprint. View upcoming obligations, updates from Orbitax, tax humour and more.

Contacts

Add unlimited stakeholders to your Orbitax Contacts, including tax advisors and non-tax people. Send scheduled alerts, notifications and assign tasks. Import contacts from various email clients or via CSV file.

Permissions

Coming Soon

Access to Orbitax can be controlled via the flexbile permissions tool. Allow power user access to the entire platform, or granular level access enabling read and edit permissions to be set at entity and data field levels.

Collaboration

Online collaboration tool where, depending on permission levels, stakeholders can be invited work with other users in realtime. Edit, comment and review any work being completed in Orbitax (data grids, forms, slides and more).

Task Manager

Ability to assign tasks and timelines to various stakeholders for completing various steps in a given workflow, e.g. completing a withholding tax form where the steps could include data gathering, preparation, review and filing.

Live Chat

Communicate with other stakeholders or Orbitax experts wherever you are on the platform. Start a chat with individuals, or create custom groups to discuss data population, filing obligations, and anything in between.

Data Surveys

Coming Soon

Data Surveys Distribute data surveys to stakeholders, receive aggregated data returns in various formats. Create a free-form data survey, or use an existing Excel data template as the basis. Set deadlines, include supporting documents and more.

Document Repository

Secure document storage and management for all of your files. Upload directly to the repository, or browse files uploaded through the Orbitax platform. Comprehensive filtering by country, entity, category, tagging and more.

Alerts & Notifications

Distrubute custom scheduled reports using your Orbitax data (e.g. quarterly entity chart schematic, monthly law change summary or corporate tax rates and tax law changes for all EMEA entities inc all parent and child entities).

Excel Add-in

Populate Excel worksheets with entity data, corporate and withholding tax rates and FX rates from the Orbitax platform. Choose to fill in an existing Excel sheet with required fields or an entirely new worksheet or workspace.

24/7 Help & Support

The Orbitax platform is monitored 24/7 by a fully staffed support team, offering access to a technical expert to either find an immediate resolution or ensure that any unresolved issue is properly fast tracked for a quick resolution.