In this article, we raise concerns about the implementation of DAC 6 (Mandatory Disclosure requirements) in the EU and its potential impacts on tax departments and advisors. Key points include:
- We remind readers that DAC 6 went into effect on July 1, 2020, with retroactive reporting requirements back to June 25, 2018.
- We express concern that many tax departments may not be adequately prepared for DAC 6 due to other pressing issues like tax reform, Digital Service Tax, OECD Pillars 1 and 2, and COVID-19 stimulus packages.
- We highlight that under DAC 6, tax advisory firms will essentially become government regulators, required to report qualifying "hallmarks" or face severe penalties.
- We pose several questions for consideration:
- Will DAC 6 have a chilling effect on the use of outside advisors?
- Will similar mandatory disclosure requirements spread beyond the EU?
- How will this impact the relationship between tax departments and their advisors?
- We urge tax departments to create a strategy for DAC 6 compliance immediately.
Overall, we aim to spark discussion about the potential far-reaching implications of DAC 6 and encourage tax professionals to prepare for these new requirements.
