1 Sep 2020

Deferral of Implementation of DAC 6 until 1 January 2021

On the 26th of June 2020 Revenue published e-brief 127/20 which confirmed that Ireland will avail of the six month deferral in requiring the reporting of transactions under Council Directive (EU) 2018/822 of 25 May 201814 amending Directive 2011/16/EU (“DAC 6”) until 1 January 2021.

Acting on a proposal from the European Commission dated 8 May 2020 the European Council agreed to allow Member States defer the implementation of DAC 6 while dealing with the Covid-19 crisis to 1 January 2021 at the latest. Ireland, along with other States, has availed of the extension.

The period for which arrangements have to be tracked and ultimately reported has not changed, arrangements the first step of which was implemented from 25 June 2018 are still covered, and this retroactive aspect of the law has not changed.

The penalty provisions inserted in the Taxes Consolidation Act via the Finance Act 2019 will be retrospectively amended so that transactions which occurred between 25 June 2018 and 31 December 2020 can now be reported from some date after 1 January 2021, rather than from 31 August 2020, without incurring penalties.

The time limits for notifying historic arrangements will likely be amended to 28 February 2021 but additional domestic legislation will be required to specify the exact date and replace the 31 August 2020 deadline Ireland implemented previously.

The Revenue online reporting portal will be available from 1 January 2021.

Thus far no Revenue guidance on the specifics of the Irish implementation of DAC 6 has been published, which is unfortunate given the lack of detail in the implementing legislation in Finance Act 2019.

Once Revenue guidance is available it will be clearer what advisers and taxpayers need to do to ensure compliance as the directive.