UK-based intermediaries should consider themselves “bound” by DAC6 even after Brexit, lawyers have warned.
As the end of the Brexit transition period draws closer, firms must prepare for what comes next.
Sarah Gabbai, senior associate at law firm McDermott Will & Emery, believes DAC6 is “highly likely to continue to apply if a trade deal with the EU is ratified before the end of the transition period,” as it is now a firm part of EU policy.
DAC6 applies to UK intermediaries, including international fiduciaries, family offices and their advisers.
It should not be taken light either. “[Its] impact will be wide-reaching on both taxpayers and their advisers,” said Stuart Crippin, partner and head of private client at Seddons.
If no trade deal is ratified before the end of the transition period, the UK Government could modify or revoke the UK’s DAC6 implementing regulations.
Ms Gabbai said that in practice a full-scale repeal “seems highly unlikely, given HMRC’s stated aim to continue tackling tax avoidance and evasion using international tax transparency standards.
“So one should assume DAC6 is here to stay as far as the UK is concerned.”
Firms that have DAC6 reporting obligations in more than one country should be aware that the UK and the EU member states vary in their interpretation of DAC6, not only in terms of penalties, but also in terms of reporting deadlines and whether a cross-border arrangement is reportable.
Getting the right advice is key to avoiding any errors in regards to this.
To comply with their DAC6 obligations, UK-based intermediaries will first need to consider whether they have been involved in implementing or advising on any reportable cross-border arrangements–for themselves ...