White paper

How to tackle DAC6, a monumental new challenge for corporate taxpayers

Corporate tax professionals have navigated relentless regulatory change in recent years as authorities worldwide pushed for greater digitalization, disclosure, and transparency in tax reporting.

Now comes the EU’s Directive on Administrative Cooperation 2018/822 or DAC6. It is the latest example of countries collaborating to mandate digital disclosure of corporate financial information so tax authorities can assess risk, close loopholes, and determine whether to conduct audits.

Deloitte called DAC6 “one of the most significant changes for tax advisors, service providers, and taxpayers in recent years.” Failure to comply can result in multimillion-euro fines, reputational damage, and criminal penalties.

Be aware that this is just the beginning

DAC6 is the EU’s implementation of a BEPS action item (No. 12) which other countries are now in the process of enacting. Mexico, for example, has scheduled implementation in 2021 with requirements similar to DAC6—including retroactive reporting and stiff penalties for non-compliance.

That’s more reason to ensure your solution is scalable and adaptable as the rules overseeing disclosure of cross-border arrangements expand and evolve.

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