DAC6 & COVID-19

The Cyprus Tax Authorities published on 22/05/2020, the proposal of the EU regarding the grant of extension on deadlines for reporting under the Directive 2011/16/EU Directive on Administrative Cooperation (DAC), in view of the Covid-19 outbreak and the disruption caused in the business sector at global level.

In particular, the proposal refers to deferral of deadlines for reporting under the Directive (EU) 2018/822 (also known as DAC6, referring to automatic exchange of information in relation to reportable cross-border arrangements) and Directive 2014/107/EU (also known as DAC2, referring to automatic exchange of information in relation to information on financial accounts).

The EU proposal was published on 08/05/2020 and contains the following responses:

• Defer the time limit for exchange of information under DAC2 on Reportable Financial Accounts by 3 months, i.e. until 31 December 2020;
• Change the date for the first automatic exchange of information under DAC6 from 31 October 2020 to 31 January 2021;
• Change the date for the beginning of the period of 30 days for reporting cross-border arrangements under DAC6 from 1 July 2020 to 1 October 2020;
• Change the date for the first filing on the first reporting period under DAC6 (i.e. for arrangements occurring as from 25 June 2018 till 30 June 2020) from 31 August 2020 to 30 November 2020,

Further there is a possibility of extending the above-mentioned deferral period, depending on the evolution of the Covid-19 pandemic.

Even though the proposal states that the Member States shall adopt and publish by 31/05/2020 the laws and regulations to comply with this initiative, whose provisions shall apply from 01/06/2020, it is of doubt whether the subject deadlines shall be met. Nevertheless, it is expected that the outcome of the initiative shall be derived within the following months.

Contact Persons:

Marios Palesis
Partner – Tax Department
Marios.Palesis@kinanis.com

Artemis Kyriakou
Associate – Tax Department
tax@kinanis.com