DAC6: cross-border taxation arrangements

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This guide highlights some key issues, especially for professional trustees and advisers on TRS as a result of the UK implementing EU Directive 2018/822 (known as DAC6).

The following summary of some of the main points and issues is made to assist but it is not formal legal advice and must not be relied upon as such.  The overall actual position will depend upon the circumstances of each trust, on which specific advice should be obtained.


A previous EU exchange of information Directive (2011/16) had limited impact in practice. Directive 2018/822, which amended it, has dramatically expanded the number of cross-border transactions potentially notifiable to member state tax authorities.  Each member state is responsible for transposing DAC6 into national law, implementing and enforcing it.   It has been incorporated into UK law by SI 2020/25 (the “Regulations”) made on 9 January 2020.

Key Features

An obligation to file information on any “reportable” cross-border arrangement with “material relevance” meeting one (or more) of 5 categories of “hallmarks” A, B, C, D and E and concerning either:

  • At least two EU countries, or
  • An EU country and a non-EU country

Only hallmarks in categories A, B and C must fulfil an objective “main benefit test” i.e. one or more of the main benefits is obtaining a (EU not non-EU) tax advantage. 

Reporting deadlines

This is triggered by the first of the following occurring if there is a reportable cross-border arrangement from 25 June 2018 onwards:

  • The day after it was made available for implementation
  • The day after it was ready for implementation 
  • When the first step was taken to implement it
  • When aid, assistance or advice was provided by an “intermediary” 

The deadlines for reporting after the triggering first step are:

  • 31 August 2020 for steps between 25 June 2018 and 30 June 2020

Otherwise within 30 days.

Who has to report?


  • See under heading “intermediaries” below as to what this term means
  • If an intermediary meets the criteria to be a UK intermediary (incorporated in, resident or has PE in the UK or governed by UK law or registered with UK legal, tax consultancy services association) then reporting is to HMRC
  • The intermediary must report information in its knowledge, possession or control 
  • If subject to legal professional privilege (LPP) such as solicitors, please see below
  • Benefitting taxpayer – if for example:
  • There is no intermediary (such as in-house designed arrangements)
  • If intermediary subject to LPP and there is no other intermediary involved to whom LPP does not apply
  • There is an intermediary, but that intermediary is located outside of the EU

Reporting procedures 

Regulations provide for reporting online (with paper system for those unable to use that. What must be reported includes:

  • Identification details of intermediaries and relevant taxpayers 
  • Relevant hallmark(s)
  • Summary of arrangements (including start date and any applicable domestic tax rules)
  • Value (i.e. of the tax advantage) of the arrangement
  • Summary of any relevant business/ other activities
  • Details of any other EU countries involved (actually or likely to be) and of any persons there who will be affected  
  • After the report is made, HMRC allocates a reference number
  • Further reports are required if there is an actual tax advantage in a later tax year
  • HMRC shares information reported to it under DAC6 with other EU tax authorities quarterly.


What is an intermediary?

Someone who designs, markets, organises, makes available for implementation, or manages the implementation of a reportable cross-border arrangement.

It includes someone who provides aid, assistance or advice – to the extent they can reasonably be expected to know that is what they have done

An employee is not an intermediary but partners in partnerships can be (although partnerships can report on behalf of their partners)

Sole trader individuals may have to make intermediary reports

There are two types of intermediary:

  • Promoters – those who design, promote and implement
  • Service providers – those who provide assistance or advice

Service providers (but not promoters) may have a “knowledge defence”.  If this applies, they do not need to report.

Is DAC6 of relevence to me?

Yes! If you are involved in cross-border transactions involving at least one EU country, e.g.:

  • Giving tax advice 
  • Assisting with tax compliance
  • Drawing up documentation 
  • A company or other service provider
  • Promoting/ marketing planning for your/ other organisations.

Cost of getting it wrong:

Normally, this is limited to a one-off penalty of £5,000. HMRC must get First Tier Tax Tribunal approval to levy additional penalties.

Some practical issues and current unknowns/ uncertainties

These include: 

  • A risk of “protective” and “partial” multiple reporting and reference numbers, especially if several intermediaries are involved, not all of whom may be aware of the “whole picture”.
  • How in practice can an intermediary demonstrate all relevant information in their knowledge, possession or control has been disclosed?
  • Communication (especially exchanging information) between intermediaries where more than one involved  
  • Submitting a full report within a very tight deadline (30 days) given all the above
  • What arrangements are (not) caught by the hallmarks – this is not included in the regulations
  • When is an intermediary a promoter or a service provider?
  • When might the “knowledge defence” (service providers only) apply so do not need to report?

According to 13 January 2020 UK Government summary of responses to consultation (July to October 2019) these (and other) issues will be covered in “detailed guidance” with examples promised by the end of June 2020.

What should I do now?

  • Engage in meetings etc. with HMRC redrafting of guidance
  • Keep up to date with developments (ask to be on our mailing list for updates)
  • Consider internal training (especially on HMRC guidance when available)  
  • Put in place compliance systems and ensure adequate resources available 
  • Reviewing existing matters with a possible “first step” from 25 June 2018 
  • Engage with clients/ any other intermediaries involved in potentially reportable transactions 
  • Get advice if needed in time to comply with reporting deadlines!

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