“DAC6” stands for the Directive on Administrative Cooperation in (direct) taxation in the EU, volume 6. It operates as the sixth amendment to the long-running series of directives designed to encourage cross-border information exchange in the EU.

Since 2018, the EU has been calling on its member states to implement mandatory disclosure regimes (MDR) within their jurisdictions. DAC6 is the cornerstone of the bloc’s MDR program.

As of 2022, DAC6 is in full force in Cyprus, Luxembourg, and the EU.

Since 2018, the EU has been calling on its member states to implement mandatory disclosure regimes (MDR) within their jurisdictions. DAC6 is the cornerstone of the bloc's MDR program. As of 2022, DAC6 is in full force in Cyprus, Luxembourg, and the EU.

It is critical for intermediaries and taxpayers with businesses in the EU to understand and comply with their obligations to disclose reportable cross-border arrangements to EU tax authorities.

Under DAC6, an arrangement is reportable where it meets one or more of the hallmarks set out in the legislation, contains cross-border elements and has the potential to affect taxes in at least one EU member state.

The objective of the regime is to identify arrangements that point towards aggressive tax planning. Failure to make the necessary disclosures can lead to significant penalties.

Intermediaries (typically tax planners, fiduciary services providers, or professional service providers) involved with Reportable Cross-Border Arrangements (RCBA) must report information on the RCBA to their tax authorities. The obligation is ultimately with the taxpayer, where the intermediaries do not need to report.

Combining our DAC6 legal expertise with our innovative mindset, we developed the DAC6 Assessment and Reporting Tool to assist intermediaries and taxpayers, with businesses in the EU, to understand and comply with their obligation to disclose reportable cross-border arrangements to EU tax authorities.

Our tool allows users to determine whether a transaction or arrangement contains one of the so-called ‘hallmarks’ or meets the ‘main benefit test’ to be considered a cross-border arrangement. Suppose the outcome of the assessment is that the arrangement is reportable. In that case, the tool provides a structured report designed to provide jurisdiction-specific data, to local tax authorities, in the format they require.

Although developed with Luxembourg and Cyprus' mandatory disclosure regimes in mind, DAC6 is embodied in pan-EU legislation; our toolkit is relevant to intermediaries and taxpayers across the whole of the EU.