Reporting obligation of cross-border arrangements under DAC VI from 1 January 2021

Based on the implementation of the sixth amendment to the Directive on administrative cooperation in the field of taxation (DAC VI), an obligation has been introduced in EU Member States, including the Czech Republic, to notify tax authorities of certain cross-border transactions and other arrangements that meet the characteristics defined by law.

We have already brought you more information on the issue in the article DAC VI Directive: New Obligation to Notify Tax Authorities of Certain Transactions in Advance.

The start of the reporting obligation was postponed in the Czech Republic to the beginning of 2021 by means of the Government Regulation. In particular, the deadlines for compliance with the reporting obligation are as follows:

  • Until 30 January 2021 for cross-border arrangements that have been made available or ready for implementation or the first step of which has already been implemented between 1 July 2020 and 31 December 2020 (inclusive);
  • Until 28 February 2021 for cross-border arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 (inclusive); and
  • Within 30 days of the day on which the arrangement was made available or ready for implementation or the first step of which has been implemented (whichever comes first) for the arrangements starting from 1 January 2021.

In this context, please note that in December the Tax Administration published on its website the most frequent questions and answers in relation to DAC6. In October 2020, it also published an electronic form of DAC6 Notification.

The purpose of this European regulation is to gain a better overview of the application of tax rules and possible aggressive tax planning for the financial administration. However, the parameters of the reporting obligation have been defined very broadly and may, in some cases, also affect standard cross-border transactions, not only intragroup ones, but also with independent entities.

We therefore recommend that you examine the extent to which this new obligation may apply to you or your company and, where appropriate, identify possible cross-border arrangements that could be subject to the reporting obligation.

If you are unsure whether this obligation might apply to you or your company, or if you need assistance while setting up related internal processes in relation to this new reporting obligation, please do not hesitate to contact us.

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