In our meetings with our DAC6pro users, we have learned that many intermediaries and multinationals still struggle with making the actual DAC6 assessment. People find it challenging to do a DAC6 assessment because they have trouble understanding the (tax) rationale behind hallmarks or reading the complex tax and/or legal language.
Pre-check your DAC6 assessment
We’re considering including a new DAC6 pre-assessment feature, i.e., a questionnaire that only contains a few simple questions in Lehman terms so that a non-DAC6 professional can easily determine whether a full assessment is required. This DAC6 pre-assessment ensures that at a very minimum, an audit trail exists to most workstreams of intermediaries and that there is proof of assessment, even if that is a light assessment.
What will this feature look like?
When you log in to DAC6pro, a window will open where you first have to enter a short description of the arrangement/workstream and then complete a short questionnaire with a few straightforward questions that determine whether you have to make a full DAC6 assessment. Questions the user would have to complete could be as follows:
- Are you involved in an arrangement as:
- Intermediary – lead
- Intermediary – assisting
- Taxpayer – with intermediary involved on the arrangement
- Taxpayer – with no intermediary involved on the arrangement
- Does your arrangement involve:
- A construction (only if new – i.e., after June 25, 2018)
- Compliance work (e.g. tax returns)
- Other work – descriptive in nature (e.g. transfer pricing documentation, due diligence reports)
- Is the arrangement:
- Cross-border
- National
- Is the arrangement able to be implemented:
- Yes
- No
Depending on the answers, you will finish the “light” assessment or be pushed to the full assessment area (we will validate the final questions with our customers and prospects to get to a “golden standard”). This DAC6 pre-assessment ensures that at a very minimum an audit trail exists to most workstreams of intermediaries and that there is proof of assessment, even if that is a light assessment.
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We also understand that the authorities are now preparing additional guidance and instructions for their authorized officers when using revenue information powers with regard to the DAC6 compliance of intermediaries and taxpayers. In various EU countries, revenue officers have already raised questions directly with taxpayers and intermediaries on the reports they have received.
Revenue officers are entitled to raise queries concerning the DAC6 information submitted to them. The new guidance and instructions deal with additional powers officers may exercise when they are unsatisfied with the information provided, and the procedure for requesting additional information. Additionally, officers may make a request with regard to the DAC6 assessment, administration and internal processes from intermediaries and taxpayers when they suspect a much higher volume and can ask for higher quality DAC6 reports.
The additional guidance for revenue officers sets out the requests officers may make and the orders they may seek when investigating the liability of a taxpayer. This includes requests for books, records and accounts, as well as explanations relating to DAC6 compliance. These requests can be issued to a taxpayer, and to the financial institutions or third parties connected with that taxpayer.
Do you have any questions with regard to the above article? Then schedule below a meeting with one of our experts.
Please, let us know if you have any questions or ideas by sending us an email (dac6pro@tax-model.com) or book a meeting with one of our Tax Technology Experts here. We’d love to hear from you, we’re happy to help you!
