The EU Council Directive 2011/16 regarding cross-border tax arrangements, named DAC6 provides new obligations for companies and consultants.
If cross-border arrangements lead to tax benefits without substance of economic benefits, these will become cross-border transactions to be reported.
- acquisition of companies with tax losses;
- ownership in companies from jurisdictions not exchanging information;
- lack of economic substance of subsidiaries-lack of staff, equipment, assets, premises; transfer intangibles difficult to value;
- variance of projected EBIT for cross-border transfer of functions, assets and risks
The mandatory action will enter into force starting 1st of July 2020 and will cover all arrangements in place after 25th of June 2018.