When shall we report under DAC 6 for the first time?

The first-time reporting of cross-border arrangements, originally planned to occur already this summer, will be postponed, most likely to the beginning of the next year: the legislative process implementing DAC 6 has been delayed, and the amendment is now expected to enter into effect in the course of September, at the earliest. Also because of the COVID-19 pandemic, the European Union has now provided member states with the option to postpone the reporting duty, due to extraordinary circumstances. The Czech financial administration has already let it be known that they will make use of this option.

Because of the failed completion of the legislative process, the effective date of the amendment transposing into Czech law the EU Directive extending automated exchange of information to information on selected cross-border arrangements, known as DAC 6, has been postponed. Czech parliament was unable to pass the necessary amendment to the Act on International Cooperation in Tax Administration within the deadline required by the EU Directive. The original effective date, 1 July 2020, thus does not apply. The bill has been passed on to the Senate, which is expected to debate it by the end of July. The bill is thus not expected to enter into effect before September of this year.

In June, a discussion took place on the EU level on postponing the deadline for the first-time reporting of cross-border arrangements because of the impact of the COVID-19 pandemic. The EU responded by adopting the COVID-19 DAC, which, among other things, allows member states to postpone the duty to report under DAC 6 by up to 6 months. This directive has already been published in the Official Journal of the EU,  and it is now up to the individual member states to transpose it. Most states, including Luxembourg, the Netherlands, France and the United Kingdom decided to postpone; so far, only Finland announced that they will not use this option. Notably, the disunited approach may cause problems mainly for large groups operating across the continent.

Czech legislators responded rather quickly, and incorporated the option to postpone the reporting in an amendment to certain laws in connection with the COVID-19 pandemic that was already passed in the state of legislative emergency. The amendment to the Act on International Cooperation in Tax Administration has authorised the government to postpone the deadline for the automated exchange of information with other member states by means of a governmental regulation/decree. However, a governmental regulation to this effect has not yet been issued.

At the moment, the financial administration assumes the following deadlines for meeting the reporting duty:

  • Reportable cross-border arrangements whose first steps were taken between 25 June 2018 and 30 June 2020 must be reported by 28 February 2021.
  • Reportable cross-border arrangements made available or ready for implementation or whose first steps were taken between 1 July 2020 and 31 December 2020 must be reported by 30 January 2021.
  • Reportable cross-border arrangements made available or ready for implementation or whose first steps were taken in after 1 January 2021 must be reported within 30 days of the relevant event.
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