What is MDR-DAC 6?
Introduction
On March 25, 2020, Luxembourg implemented Directive 2018/822/EU, amending Directive 2011/16/EU, which concerns the automatic and mandatory exchange of information in the field of taxation related to cross-border arrangements that require reporting.
Under this law, intermediaries are obligated to report information they know, possess, or control regarding cross-border arrangements that require reporting to the competent authorities. In some cases, the obligation to report such information falls on the taxpayer rather than the intermediary.
Reporting Deadlines
Cross-border arrangements established between June 25, 2018, and June 30, 2020, that require reporting, were initially supposed to be reported by August 31, 2020. Due to the prevailing health situation, tax authorities showed leniency and allowed a 6-month extension, setting the ultimate reporting deadline to February 28, 2021.
For cross-border arrangements implemented between July 1 and December 31, 2020, the deadline for reporting is January 30, 2021.
No extension is granted for cross-border arrangements implemented after January 1, 2021, and the regular reporting period of 30 calendar days applies.
Sanctions
Taxpayers and intermediaries failing to transmit information, transmitting it late, providing incomplete or inaccurate data, or failing to notify or notifying late, risk a maximum fine of €250,000 when there is an obligation to report or notify in Luxembourg.
Custom Reporting Tool
Taxconnected has developed a specific reporting tool that allows taxpayers and intermediaries to declare their cross-border tax arrangements in all EU member states. Our experts closely monitor national and European legislative developments to ensure your reports remain compliant with current legal provisions.
How Does the Tool Work? A practical questionnaire based on the national legislation of different EU member states helps you identify arrangements requiring reporting and create reports. These reports can be converted into PDF format and serve as support for the file to be submitted to the competent tax authorities through the MyGuichet website. An efficient way to track and manage your tax obligations across different member states at a glance.
For more information on the new DAC6 legislation or if you need assistance analyzing your situation, interested in a demo of our reporting tool? Contact our experts.
