The Dutch Tax Authority has published an English-language version of its general guidance on Mandatory Disclosure Rules/DAC6.
The European Directive Mandatory Disclosure Rules (MDR)/DAC6 will come into effect on 1 January 2021. As a result of the Dutch implementation of this Directive, intermediaries and/or taxpayers must report potentially aggressive cross-border tax arrangements to the Tax and Customs Administration. These are tax arrangements involving residents of different countries and which could possibly be used to avoid taxation.
Note, because of COVID-19 it has been decided that mandatory disclosure in the Netherlands will start on 1 January 2021 instead of 1 July 2020.
Which arrangements need to be reported?
Cross-border arrangements that meet one of the hallmarks must be reported. There is a list of these hallmarks in the DAC6 Directive. For a number of hallmarks, taxpayers only need to report the arrangement if the most important benefit (or one of the most important benefits) of the arrangement is gaining a tax advantage.
The checklist contains a short overview of the hallmarks.
Who files the report?
If taxpayers are involved as an intermediary in a cross-border arrangement, that must be reported. There are two exceptions to this rule. Taxpayers are not required to report the cross-border arrangement subject to mandatory disclosure in the following cases:
- Another intermediary has already reported the arrangement. And this intermediary has given a reference number as proof.
- Taxpayer has a legal professional privilege.
The taxpayer a cross-border arrangement is intended for must report it himself in the following cases:
- Only an intermediary from outside the European Union is involved in the arrangement.
- The intermediary involved in the arrangement has invoked his legal professional privilege, and is therefore not required to do so.
- No intermediary at all is involved in the tax arrangement.
When do you have to report?
The DAC6 Directive has retroactive effect. Between 1 January 2021 and 28 February 2021, the taxpayers are therefore required to report the cross-border arrangements which are involved in from 25 June 2018 to 1 July 2020.
For reportable cross-border arrangements in which taxpayers are involved from 1 July 2020 to 1 January 2021, that required to report between 1 January 2021 and 31 January 2021 (the transitional period).
For cross-border arrangements in which taxpayers are involved as from 1 January 2021, that must always report within 30 days. View a timeline showing these periods.
How to report?
Use the ‘Disclosure of Cross Border Arrangements form (CBA)’, in English. The form can be filling via the Tax and Customs Administration’s data portal from 1 January 2021.
Following details should be in the report:
- information concerning the taxpayer and associated persons;
- a summary of the content of the tax arrangement;
- the relevant hallmarks;
- the relevant national statutory provisions;
- the value of the tax arrangement;
- implementation date; and
- the relevant EU Member States.
