- Royal Decree 243/2021 of 6 April develops the obligation to report cross-border tax-planning arrangements (DAC 6).
- Intermediaries report and, if there are none or they are bound by professional secrecy, the taxpayer concerned, within 30 days.
- Reporting an arrangement does not mean it is fraudulent or that the tax authority accepts it.
On 7 April 2021 the BOE published Royal Decree 243/2021 of 6 April, amending the General Regulation on tax management and inspection to transpose Directive (EU) 2018/822, known as DAC 6. It completes the reform of the General Tax Law made by Law 10/2020 of 29 December, and creates the obligation to report to the authorities cross-border tax-planning arrangements that show certain features, called hallmarks.
It is a new obligation for advisers, banks, lawyers and other intermediaries, but also for the taxpayers concerned. The rule makes clear that reporting an arrangement does not mean it is fraudulent or avoidance-driven, nor that the authority’s lack of reaction amounts to accepting its legality. Its purpose is to provide transparency and deter the use of aggressive schemes, and it forms part of the automatic exchange of information between EU States.
What must be reported
Cross-border arrangements showing the hallmarks set by the directive must be reported, provided the connecting criteria with Spain are met. The material scope covers all taxes except, basically, VAT, excise duties and customs duties. The regulation defines the concept of an “arrangement”, not well rooted in Spanish law, and specifies the requirements that make it cross-border and some of the hallmarks, to give greater legal certainty.
A scheme involving payments to a low- or no-tax jurisdiction, the use of structures that make it hard to identify the beneficial owner, or the conversion of income into income taxed at a lower rate may be reportable. Not everything that crosses a border must be reported: it depends on the combination of hallmarks and, in some cases, on whether the tax advantage is one of the main reasons for the arrangement.
Who reports and when
The main obligated party is the intermediary, that is, whoever designs, markets, organises or manages the arrangement, or provides assistance for it. When the intermediary is bound by professional secrecy, as lawyers are, it is exempt and must notify the other intermediaries and the taxpayer concerned within five days, and the latter then files the report. If there is no obligated intermediary, the taxpayer concerned reports.
The report is filed within 30 calendar days after the obligation arises. Marketable arrangements have quarterly updates. And the regulation provides a transitional regime: arrangements whose first step was carried out between 25 June 2018 and 30 June 2020, and those arising since 1 July 2020, will be reported within 30 days after the entry into force of the ministerial order approving the forms, still to be published.
What to review
Companies and families with international structures should, with their adviser, draw up an inventory of transactions carried out since mid-2018 that may fit one of the hallmarks, especially loans or payments to low-tax jurisdictions, corporate restructurings and remuneration schemes. The information reported will allow the tax authority to cross-check data with the other EU administrations.
It is also worth reviewing agreements with advisers: who will report, how they will communicate with each other and what information the client must supply. As the transitional deadline will depend on the implementing order, now is the time to prepare the data. This information is general in nature and does not replace advice on each case.
Reporting is not confessing: it is complying with an information duty that already exists and that the tax authority will start to use.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
