The first reports under DAC6 will be made on January 2021.
European Member States have been given an extension to comply with certain rules on cross-border information reporting, as a response to the coronavirus (Covid-19) pandemic.
The Council of the EU announced that it has adopted an amendment to the Directive on Administrative Cooperation (DAC), allowing EU Member States an option to defer the time limits for filing and exchange of information, with respect to mandatory disclosure requirements (MDRs) for intermediaries and relevant taxpayers under the Directive on Administrative Cooperation (DAC6).
The optional deferral is in response to the severe disruption to the activities of many financial institutions, tax advisers and authorities caused by the Covid-19 lockdown measures.
Possible additional extension from the council under conditions. The amendment provides the possibility for the Council to extend the deferral period once, for a maximum of three further months. This extension will depend on the evolution of the pandemic and would be subject to strict conditions.
Amendments to the reporting deadlines.
The amendments, as adopted, give EU Member States the option to delay the deadlines for filing information on reportable cross-border arrangements by up to six months, as follows:
1 January 2021 – 30-day period for reporting cross-border arrangements starts
The beginning of the 30-day period for reporting cross-border arrangements, will likely be extended from 1 July 2020 to 1 January 2021.
28 February 2021 – Reporting of historical cross-border arrangements
The deadline for the reporting of historical arrangements – implemented between 25 June 2018 and 30 June 2020 – will likely be extended from 31 August 2020 to 28 February 2021.
30 April 2021 – Marketable arrangements
The new deadline for the first periodic report on marketable arrangements, will likely be 30 April, 2021.
30 April 2021 – First exchange of information
The first exchange of information on reportable cross-border arrangements between EU Tax Authorities, will likely take place on 30 April 2021, instead of 31 October 2020.
Based on the above deadlines Cyprus is expected to postpone deadlines by six months with legislation amendments, based on the EU directives. DAC 6 reporting will affect all local companies or establishments of foreign companies with cross-border transactions, regardless of the postponement of the reporting deadlines. Even where it is determined that no transactions are reportable, this should still be documented accordingly, to maintain an audit record.