Becoming DAC6 compliant with BDO – DAC6 tool

The DAC6 Directive obliges intermediaries and taxpayers to report information on certain cross-border arrangements. Reporting obligation applies to cross-border arrangements which contain at least one of the Hallmarks listed in the legislation. The Hallmarks are characteristics or features of cross-border arrangements that present an indication of a potential risk of tax avoidance. As the reporting obligation is implemented differently in the EU Member States and non-compliance may result in severe penalties, it is vital for intermediaries and taxpayers to manage their reporting obligation carefully.

Even though the Hungarian legislation implemented the provisions of the Directive as of 1st of July 2020, reporting obligation may arise in certain cases with retrospective effect, however arrangements that were put into place before 25 June 2018 do not have to be reported.

As you may be aware, the deadline for the reporting liability is postponed in certain EU countries, including Hungary as well:

• for the ‘historical’ cross-border arrangements covering the period25/06/2018 - 30/06/2020, the deadline is 28 February 2021.
• Instead of 1 July 2020 the beginning of the 30 day period for reporting the cross-border arrangement is changed to 1 January 2021.
• For 'marketable arrangements' the reporting obligation should be done for the first time by 30 April 2021.

BDO has developed a DAC6 tool, which assists intermediaries and relevant taxpayers in identifying the DAC6 reportability of their arrangements.

The importance of the BDO DAC6 tool is that it helps identifying, whether reporting obligation arises for a Member State or not in case of an arrangement. If so, the tool assists further to compile all the relevant information for the reporting. Thus, the BDO DAC6 platform is an ideal tool to be compliant with the DAC6 legislation, covering all of the EU Member States.

In the view of the substantial fines that may be imposed by the State Tax Authority, and due to the fact that the reporting obligation may be applicable to the relevant taxpayer as well (and not only to the advisors) we would recommend to act with due care. 

With the assistance of the BDO network, we can assure you to become DAC6 compliant in all EU Member States. We support your business and provide professional assistance with the DAC6 legislation, BDO Hungary Tax Advisory Ltd. is at your disposal.

You can find more information of the tool and DAC6 compliance here.