DAC 6 notification requirement - What to consider now?

The 30-day deadline for electronic submission of DAC 6 notifications has been "armed" since 01.07.2020, as the BMF has rejected the extension of the submission deadline made possible by the EU and understood as a Corona aid measure. We have summarized the relevant questions and answers regarding the DAC 6 notification requirement below.

What? - The DAC 6 notification requirement

The DAC 6 notification obligation covers cross-border tax arrangements, i.e. structures and transactions that contain a cross-border element and can lead to tax advantages. The structures covered by the notification obligation are delimited on the basis of specific characteristics (so-called hallmarks). Since these characteristics are defined very broadly and the German tax authorities - despite massive criticism - have so far imposed very few restrictions, even common and less complex structures may be subject to the notification requirement. The notification requirement does not mean that the structures to be reported would be "unusual" or "aggressive". In this respect, every cross-border structure that can bring about a tax advantage should in principle be examined for a reporting obligation.

Who? - The actors

The notification obligation can affect both consultants (so-called intermediaries) and taxpayers (companies as well as private individuals, so-called users). In individual cases, it is necessary to agree on who is subject to the statutory notification obligation.

How? - The message

The notification to be submitted to the tax authorities includes both a general description of the consulting result and its tax consequences as well as personal information on the taxpayer, other parties involved and the consultants involved. The notification must be submitted electronically in accordance with a standardized procedure.

Why? - The misdemeanor

If the notification obligation is not fulfilled, not fulfilled on time or not fulfilled in full, this constitutes an administrative offense for the intermediary or the taxpayer, which in Germany is punishable by a fine of up to EUR 25,000. This applies to arrangements that have been made available or implemented since 01.07.2020. In principle, the notification obligation also has a retroactive effect on arrangements since 24.06.2018, but is not subject to a fine in this retroactive period until 30.06.2020. If the notification obligation (also) exists abroad, the penalties may be significantly higher.

Process vs. panic ? - The relevant case constellations

PSP's arrangements: PSP has implemented an internal software-supported DAC 6 compliance process as of July 1, 2020, which ensures that all consulting services we provide for you are examined to determine whether they trigger a notification obligation. If an obligation to notify cannot be ruled out in an initial overview check, we initiate - in direct consultation with you - a more in-depth check by our internal DAC 6 working group and then - if necessary - also make the notification in due time and in consultation with you. We also ensure that the obligatory notice is included in the tax return. If PSP advises you on a tax structuring issue, it is part of the scope of our advice and our claim that we examine the potential obligation to notify and actively approach you.

Structuring of other advisors: If structuring is carried out by other advisors (who are based in the EU), you should be able to assume that they will also proactively make you aware of a potential DAC 6 notification obligation. Should you have any doubts about this or wish to review a specific issue, the PSP experts at the DAC 6 Helpdesk will be happy to provide you with a second opinion.

In-house structuring: In the case of in-house structuring - designed and implemented by yourself - or if you carry out structuring with advisors and group companies from third countries that are not subject to notification in the EU, the possible legal notification obligation lies with you as the user of the structuring. We would be happy to provide you with our DAC 6 expertise for an ad hoc review of corresponding transactions and structuring. Our two-stage review process enables us to respond to your inquiries efficiently and in a target-oriented manner. If you assume that you regularly have reportable structures, we will be happy to support you in the implementation of a company-internal DAC 6 process.

Finally, we can also transmit notifications to the competent German authority, the Federal Central Tax Office, on your behalf at short notice, as we have the relevant registrations for electronic transmission.

The answer! - The DAC 6 Helpdesk

PSP has established a "DAC 6 Help Desk" for all questions related to the DAC 6 notification requirement. Please contact your PSP contact person or directly: