German implementation of EU Mandatory Disclosure Rules (DAC6)

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With the Act on the Introduction of an Obligation to Report Cross-border Tax Arrangements of 21 December 2019, DAC6 was transposed into national law. The German Federal Ministry of Finance (BMF) has published a draft of administrative provisions (BMF letter) dated 14 July 2020 with the aim of enabling the legislator to react to undesirable tax arrangements earlier than before in the interest of fair taxation (legal-political evaluation). In addition, the tax administration should be able to use the information obtained with the notifications in the assessment procedure of the relevant taxpayer of cross-border tax arrangements (assessment support evaluation).

Cross-border tax arrangements that meet the statutory hallmarks must be reported to the German Federal Central Tax Office by intermediaries, or, if applicable, by the relevant taxpayer. The report must be submitted within 30 days of the relevant event (at the latest from the first implementation step). Failure to report, incomplete or late reporting may be punishable by a fine. To ensure proper handling, we recommend the introduction of a tax compliance management system.

Taxpayers now face the task of recording and reporting all cross-border tax arrangements implemented between 24 June 2018 and 30 June 2020 and thereafter. This requires a “manual” review of all tax arrangements implemented until 30 June 2020 and the implementation of systems to ensure proper reporting as of 1 July 2020.

We have summarised some of the key points you need to be aware of including what needs to be reported, how and who this applies to.

For more information or guidance on this topic, please contact Konrad Rohde. You can view more resources on EU Mandatory Disclosure Rules.