DAC 6: Transposition of the tax intermediaries Directive
On 30 December, Law 10/2020 of 29 December, transposing Council Directive (EU) 2018/822 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements, also known as DAC 6, was published in the BOE (the Spanish Official Gazette).
This Directive establishes an obligation for intermediaries to inform the tax administration about cross-border tax planning arrangements. The 23rd and 24th additional provisions of the Spanish General Tax Law (hereinafter, LGT (Ley General Tributaria)) have been transposed into the Spanish law.
The reporting obligation concerns transactions that have indications of “potentially aggressive tax planning” with a cross-border component. All these arrangements are detailed in Annex IV to the Directive, but the most important are those involving a tax benefit for the taxpayer, those which consist of acquisitions of loss-making companies in order to reduce tax liabilities, transactions resulting in round-tripping funds, cross-border payments between two or more associated enterprises for deductibility or arrangements to undermine other reporting obligations.
In this case, DCA 6 imposes an obligation to inform intermediaries, which defines as “any person that designs, markets, organises or makes available for implementation or manages the implementation of a reportable cross-border arrangement”. Broadly speaking, it can be said that the persons required to file information are tax managers and advisors, as well as any other person with relevant expertise providing advice on cross-border tax planning.
The rule provides for an exemption from the obligation to provide information for those who have a duty of professional secrecy. This exemption applies to neutral transactions, in which only a legal and fiscal analysis of the tax treatment of certain transactions is carried out; but not in those where the intermediary - advisor - is actively involved in the planning. In this case, it is the taxpayer who must submit the communication form. The intermediary may, however, be relieved of the obligation of professional secrecy by means of a duly notified authorisation by the taxpayer.
Article 3.18 of the Directive defines the cross-border arrangement as follows:
an arrangement concerning either more than one Member State or a Member State and a third country where at least one of the following conditions is met:
not all of the participants in the arrangement are resident for tax purposes in the same jurisdiction;
one or more of the participants in the arrangement is simultaneously resident for tax purposes in more than one jurisdiction;
one or more of the participants in the arrangement carries on a business in another jurisdiction through a permanent establishment situated in that jurisdiction and the arrangement forms part or the whole of the business of that permanent establishment;
one or more of the participants in the arrangement carries on an activity in another jurisdiction without being resident for tax purposes or creating a permanent establishment situated in that jurisdiction;
such arrangement has a possible impact on the automatic exchange of information or the identification of beneficial ownership
Therefore, this obligation applies to tax planning operations between EU Member States or between Member States and third States, where they are resident in one or both of them, where there is a permanent establishment or when an activity is carried out without being resident for tax purposes or having a PE in that State.
System of penalties
With regard to the obligation to provide information, the legislation establishes as the main infringements, which are of a serious nature, failure to provide information, inaccurate presentation or presentation with false information. The penalty has a similar method to the obligation to provide information on goods and rights abroad (Form 720), since it is EUR 2,000 per data or data set, with a minimum of EUR 4,000.