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About the author

Preface

Table of cases

Table of legislation

1.    INTRODUCTION TO EU RULES ON TAX DISCLOSURE

A. SETTING THE SCENE 1.01

1. The classical architecture of the international tax system 1.01

2. Harmful tax competition 1.16

3. Base erosion and profit shifting 1.24

4. The post-BEPS era 1.27

B. BEPS ACTION ITEM 12 1.50

C. COUNCIL DIRECTIVE (EU) 2018/822 (DAC6) 1.62

1. Background 1.62

2. DAC6 in a nutshell 1.65

(a) Reporting duties for intermediaries regarding cross-border tax arrangements 1.66

(b) Hallmarks 1.72

(c) Transitional rules 1.77

D. JUSTIFICATION OF MANDATORY DISCLOSURE RULES 1.78

E. EU LAW LEGITIMATION 1.87

F. PROBLEMS/STRUCTURE OF DISCLOSURE OBLIGATIONS AND USE OF THIS HANDBOOK 1.94

2.    INTERMEDIARIES AND OTHER PARTICIPANTS

A. GENERAL 2.01

1. Importance of the term ‘intermediary’ 2.01

2. Intermediaries as persons 2.03

3. Taxes covered by the Directive 2.08

B. DEFINITION 2.09

1. Primary intermediary 2.09

(a) General 2.09

(b) Designing 2.14

(c) Marketing 2.16

(d) Organizing 2.18

(e) Making available for implementation 2.19

(f) Managing the implementation 2.21

2. Secondary intermediary 2.23

(a) General 2.23

(b) Relevance of knowledge of providing aid, assistance or advice 2.24

(c) Provision of service by means of other persons 2.30

(d) Exculpation 2.31

(e) Neutral activities 2.32

C. NEXUS 2.33

1. Residence for tax purposes in a Member State 2.36

2. Permanent establishment in a Member State 2.39

3. Incorporation in a Member State 2.41

4. Registration with a professional association in a Member State 2.42

D. ARRANGEMENTS WITHOUT INTERMEDIARIES 2.43

E. OTHER PARTICIPANTS 2.44

1. General 2.44

2. Relevant taxpayer 2.47

3. Intermediary 2.52

4. Miscellaneous 2.53

F. IMPORTANT PRACTICAL ISSUES NOT ADDRESSED BY THE DIRECTIVE 2.56

1. Is the intermediary a participant in the arrangement? 2.56

2. Relationship between primary and secondary intermediary activities 2.59

3. Multiple intermediaries and subcontractors in multilateral situations 2.60

4. Series and steps/parts of arrangements 2.63

3.    CROSS-BORDER ARRANGEMENTS

A. GENERAL 3.01

B. DEFINITION 3.03

1. Arrangement 3.03

(a) General 3.03

(b) Interpretation 3.07

(c) Time relevance 3.12

(d) Irrelevance of tax consequences of arrangement 3.13

2. Series and steps/parts of arrangements 3.20

3. Participants in an arrangement 3.21

(a) General 3.21

(b) Partnerships 3.23

4. Arrangement concerning (a) Member State(s) 3.25

5. Marketable and bespoke arrangements 3.26

C. CROSS-BORDER ELEMENT OF ARRANGEMENTS 3.29

1. General 3.29

2. Tax residence 3.31

(a) National law vs. treaty law 3.31

(b) Partnerships 3.35

3. Nexus 3.40

(a) Residence of participants in different jurisdictions 3.40

(b) Double residence participants 3.45

(c) PE situations 3.47

(d) Non-PE situations 3.49

(e) Impact on automatic exchange of information or beneficial ownership 3.51

D. SPECIAL INTERDEPENDENCIES WITH HALLMARKS C1 3.53

1. Basic case 3.55

2. Variation one 3.57

3. Variation two 3.58

4.    HALLMARKS

A. GENERAL FUNCTION OF HALLMARKS 4.01

B. OVERVIEW OF CATEGORIES OF HALLMARKS 4.08

1. Generic and specific hallmarks 4.08

2. Main benefit test 4.11

3. Excessive tendencies and White List 4.19

C. GENERIC HALLMARKS LINKED TO THE MAIN BENEFIT TEST 4.21

1. Generic hallmark A1: Confidentiality agreement 4.22

(a) General explanations 4.22

(b) Examples 4.26

2. Generic hallmark A2: Success-based fees 4.29

(a) General explanations 4.29

(b) Examples 4.31

3. Generic hallmark A3: Standardized documentation or structure 4.33

(a) General explanations 4.33

(b) Examples 4.37

D. SPECIFIC HALLMARKS LINKED TO THE MAIN BENEFIT TEST 4.40

1. Specific hallmark B1: Acquisition of LossCo 4.40

(a) General explanations 4.40

(b) Examples 4.44

2. Specific hallmark B2: Conversion into no- or low-taxed income 4.48

(a) General explanations 4.48

(b) Examples 4.52

3. Specific hallmark B3: Circular transactions 4.57

(a) General explanations 4.57

(b) Examples 4.61

E. SPECIFIC HALLMARKS RELATED TO CROSS-BORDER TRANSACTIONS 4.64

1. Specific hallmark C1a: No tax residency of recipient 4.67

(a) General explanations 4.67

(b) Examples 4.69

2. Specific hallmark C1bi: No tax or (almost) zero tax in jurisdiction of recipient  4.70

(a) General explanations 4.70

(b) Examples 4.73

3. Specific hallmark C1bii: Blacklist countries 4.77

(a) General explanations 4.77

(b) Examples 4.78

4. Specific hallmark C1c: Full tax exemption of payment 4.80

(a) General explanations 4.80

(b) Examples 4.81

5. Specific hallmark C1d: Preferential tax regime of payment 4.86

(a) General explanations 4.86

(b) Examples 4.90

6. Specific hallmark C2: Multiple deductions for the same depreciation  4.93

(a) General explanations 4.93

(b) Examples 4.96

7. Specific hallmark C3: Multiple relief from double taxation 4.100

(a) General explanations 4.100

(b) Examples 4.102

8. Specific hallmark C4: Transfer of assets with material difference in payable amount 4.105

(a) General explanations 4.105

(b) Examples 4.109

F. SPECIFIC HALLMARKS CONCERNING AUTOMATIC EXCHANGE OF INFORMATION AND BENEFICIAL OWNERSHIP 4.112

1. Specific hallmark D1: Circumvention of exchange of financial account information 4.113

(a) General explanations 4.113

(b) Examples 4.122

2. Specific hallmark D2: Transactions with a chain of non-transparent ownership 4.125

(a) General explanations 4.125

(b) Examples 4.129

G. SPECIFIC HALLMARKS CONCERNING TRANSFER PRICING 4.132

1. Specific hallmark E1: Unilateral safe-harbor rules 4.133

(a) General explanations 4.133

(b) Examples 4.136

2. Specific hallmark E2: Hard-to-value intangibles 4.139

(a) General explanations 4.139

(b) Examples 4.142

3. Specific hallmark E3: Transfer of assets/risks/functions leading to an EBIT-decrease 4.146

(a) General explanations 4.146

(b) Examples 4.149

5.    TIMELINES AND TRIGGERING EVENTS

A. TEMPORAL APPLICATION 5.01

1. General 5.01

(a) Entry into force 5.02

(b) Transposition period 5.03

(c) Application of new rules 5.04

(d) Regular and retroactive filing 5.05

(e) Automatic exchange of information 5.07

2. Extension of timelines due to COVID-19 5.08

(a) Optional deferral of time limits 5.10

(b) Extension of period of deferral 5.12

3. Review and amendment process 5.13

4. Time relevance of facts and circumstances 5.15

B. TRIGGERING EVENTS AND THEIR FILING PERIODS 5.16

1. Primary intermediaries 5.16

(a) Making available for implementation 5.20

(b) Readiness for implementation 5.23

(c) First step in the implementation has been made 5.27

2. Secondary intermediaries 5.29

3. Relevant taxpayers 5.37

C. IMPORTANT PRACTICAL ISSUES NOT ADDRESSED BY THE DIRECTIVE 5.39

1. Uncoordinated timelines 5.39

2. Regular versus retrospective filing and temporal application of the Directive 5.41

3. Order of appearance of triggering events 5.45

6.    REPORTING PROCEDURE AND EXCHANGE OF INFORMATION

A. REPORTING PROCEDURE 6.01

1. General 6.01

2. Arrangements with one intermediary 6.02

(a) Intermediaries as primary addressees of the Directive 6.02

(b) Intermediaries with a legal professional privilege 6.04

(c) Intermediaries without a legal professional privilege 6.11

3. Arrangements with multiple intermediaries 6.13

4. Arrangements without intermediaries (and similar situations) 6.15

(a) Arrangements with one relevant taxpayer 6.17

(b) Arrangements with multiple relevant taxpayers 6.18

5. Where to file … 6.20

(a) … for intermediaries 6.20

(b) … for relevant taxpayers 6.23

B. AUTOMATIC EXCHANGE OF INFORMATION 6.26

1. General 6.26

2. Details 6.29

7.    MISCELLANEOUS

A. CONTENT OF REPORTING 7.01

1. Types of reports 7.01

(a) Complete disclosure 7.02

(b) Partial disclosure 7.03

(c) Follow-on disclosure 7.04

(d) Correction disclosure 7.05

2. Information to be reported 7.06

(a) General 7.06

(b) Comments 7.07

(c) Language 7.11

B. TECHNICAL REQUIREMENTS 7.12

1. General 7.12

2. Details 7.14

C. PENALTIES 7.15

D. LEGAL PROTECTION 7.22

1. Against the national law implementing the Directive 7.22

2. Against the Directive 7.25

(a) General 7.25

(b) Critical comments 7.28

3. First law suit from Belgium up to the CJEU 7.33

E. DATA PROTECTION 7.37

F. SOFTWARE TOOLS 7.41

8.    FUTURE DEVELOPMENTS

A. DAC7 8.01

1. Background 8.01

2. Accompanying developments in European law regarding digital markets 8.03

3. Details of Directive (DAC7) 8.10

4. Imprint of relevant provisions 8.18

B. DAC8 AND BEYOND 8.19

C. TRANSPOSITION OF WHISTLEBLOWER DIRECTIVE 8.20

1. Background 8.20

2. Content of the Directive 8.21

(a) Material scope 8.21

(b) Requirements to receive protection 8.22

(c) Reporting channels 8.23

(d) Forms of protection against retaliation 8.24

3. Relevance for tax law 8.25

(a) General 8.25

(b) Corporate tax law in particular  8.31

9.    STATUS OF IMPLEMENTATION IN EU MEMBER STATES

AUSTRIA 9.01

BELGIUM 9.02

BULGARIA 9.03

CROATIA 9.04

CYPRUS 9.05

CZECH REPUBLIC 9.06

DENMARK 9.07

ESTONIA 9.08

FINLAND 9.09

FRANCE 9.10

GREECE 9.11

HUNGARY 9.12

IRELAND 9.13

ITALY 9.14

LATVIA 9.15

LITHUANIA 9.16

LUXEMBOURG 9.17

MALTA 9.18

NETHERLANDS 9.19

POLAND 9.20

PORTUGAL 9.21

RUMANIA 9.22

SLOVAKIA 9.23

SLOVENIA 9.24

SPAIN 9.25

SWEDEN 9.26

TECHNICAL DETAILS 9.27

10.  ANNEX: RELEVANT PROVISIONS OF DAC6

Index