The new reporting regulations of the European Union have been in effect since July 1, 2020. But which structures are affected and to what extent do the new regulations also apply to consultants in Switzerland and Liechtenstein? We explain everything about DAC6 in this article.

What is DAC6 actually?
DAC6 is a law of the European Union which stipulates that in the future international and cross-border tax arrangements with certain characteristics must be reported to the authorities. If these obligations are not fulfilled or not fulfilled in time, depending on the country, high fines may be imposed. All taxable persons and companies are affected by this regulation, as are advisors such as tax consultants, trustees and banks, provided they have their registered office or a branch in an EU member state.

What do the new regulations say?
The new DAC6 regulations have an impact on various aspects of a consultant’s daily life: For example, it must be carefully checked whether one’s own activities are subject to a reporting obligation. This check should not only be carried out for your own consulting activities, but also for all arrangements in which you advise your clients. Even if you yourself are not subject to a reporting obligation, depending on the location of your company, your client may be subject to a reporting obligation even in the case of a cross-border arrangement. It is therefore essential to inform your own clients about the current regulations in a competent and timely manner, and this offers additional value to the actual consulting service.

What is the best way to implement DAC6?
As a first step, it is advisable to check the extent to which you yourself are affected by the reporting obligation. Reportable arrangements should be recorded as standard and made available and prepared for possible reporting. To this end, affected employees should be trained accordingly and made aware of the new regulations. In addition, a number of tools have already been developed for recording your arrangements, such as the DAC6 Tracker, which supports your company in identifying reportable arrangements.

Everything important at a glance
Existing legal obligation to report cross-border arrangements in the EU
Influence of DAC6 on international tax advice
Procedure in case of a reporting obligation and necessity of training your employees