DAC6 was implemented into Maltese law on 17 December 2019 through Legal Notice 342 of 2019.
DAC 6 can trace its roots back to the OECD 2015 Action 12 Final Report, which provided a set of recommendations for the design of mandatory disclosure rules (MDR).
Transparency is one of the three pillars of the OECD/G20 BEPS Project.
Objective of MDR include:
- To obtain early information about potentially aggressive or abusive tax avoidance schemes in order to inform risk assessment;
- To identify schemes, and the users and promoters of schemes in a timely manner;
- To act as a deterrent, to reduce the promotion and use of avoidance schemes.
The tax planning arrangements with a cross-border element are required to be reported by the intermediaries or taxpayers to the authorities in the country of residence. The EU member states will then share the information with all other member states via the Common Communication Network every quarter.
The taxpayer is required to notify the tax authorities directly in the light of a taxpayer developing the arrangement in-house or is advised by a non-EU adviser.
DAC6 provides an initial one-off reporting deadline in August 2020 for arrangements implemented between 25 June 2018 and 1 July 2020. From then onwards a 30-day rolling window for reporting new arrangements will apply.
Failure to meet these requirements and deadlines may result in financial penalties and reputational damage.