What to know about the EU Mandatory Disclosure Rules (DAC 6)


On May 25, 2018, the most recent amendments to the Directive on administrative cooperation in the field of taxation (“DAC 6”), which introduce mandatory disclosure requirements for tax intermediaries and relevant taxpayers, were formally adopted and have entered into force on June 25, 2018.

EU Member States have until December 31, 2019 to change their domestic law, which will be applicable from July 1, 2020. However, intermediaries and relevant taxpayers will also be required to disclose information on reportable cross-border arrangements, whose first step of was implemented between the date of entry into force of the Directive (June 25, 2018) and the date of application (July 1, 2020). This information should be filed by August 31, 2020.

Disclosure obligation

Intermediaries or, in the absence of an intermediary, the relevant taxpayer, must report to the tax authorities on potentially aggressive tax planning arrangements in which they are involved.

Who bears the burden of disclosure?​

The primary obligation to disclose this information to the tax authorities rests with the “intermediary.” Under DAC6, an intermediary is defined as “any person that designs, markets, organizes or makes available for implementation or manages the implementation of a reportable cross-border arrangement.”

In the absence of an intermediary (e.g. the obligation is not enforceable upon an intermediary due to legal professional privilege, the intermediary is located outside the EU or because an arrangement is developed in-house), the obligation to disclose falls on the relevant taxpayer. A “relevant taxpayer” is defined as “any person to whom a reportable cross-border arrangement is made available for implementation, or who is ready to implement a reportable cross-border arrangement or has implemented the first step of such an arrangement.” Note that the disclosure requirement is not limited to reportable cross-border arrangements made available to EU taxpayers (but it does have to involve at least one EU Member State).

Regarding the legal professional privilege waiver, the text refers to the domestic law of each Member State. Member States must also ensure that exempt intermediaries notify the relevant taxpayer or another intermediary to which the obligation is passed on, of their disclosure responsibility.

Qualifying arrangements

The scope of the Directive includes all taxes of any kind with the exception of VAT, customs duties, excise duties and compulsory social contributions.

Cross-border situations

Arrangements are expected to be disclosed that affect more than one Member State or a Member State and a non-EU Member State, if disclosure requirements are met.

The main benefit test

The main benefit test is satisfied if there is an arrangement “where an independent third party, under consideration of all relevant facts and circumstances, may reasonably expect that the main benefit, or one of the main benefits, is the obtaining of a tax advantage.”


A (potentially aggressive) arrangement is reportable if it satisfies at least one of the features and elements that are considered an indication of tax avoidance or abuse – referred to as “hallmarks”. Please refer to the attached slides “MDR-Hallmarks”. Both generic hallmarks (in heading A) and specific hallmarks (in headings B to E) are listed. Certain hallmarks (in A, B and paragraph 1 of C) can only be taken into account if a “main benefit” test is also satisfied.

What information should be disclosed?

The following information are to be disclosed: the identification of the taxpayers and intermediaries involved, the hallmarks that generated the reporting obligation, a summary of the arrangement, details of the relevant domestic tax rules, the date on which the first step in the implementation is made, the value of the arrangement, identification of any other person or Member State likely to be affected by the arrangement.

Penalties for non-compliance

DAC 6 leaves it to Member States to lay down the rules on penalties applicable for infringements of the mandatory disclosure rules, with the only requirement that any penalties are effective, proportionate and dissuasive.

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