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EU Vote Allows Extension of Cross-Border Reporting Deadlines

June 24, 2020, 3:55 PM

EU countries can extend a deadline for companies and tax advisers to report cross-border tax arrangements under rules known as DAC 6.

The option to extend the deadline by up to six months follows a rule change the European Council made final Wednesday.

Under a 2018 European Union law, the Directive on Administrative Cooperation (EU 2018/822), companies and tax advisers were supposed to start reporting in July and August on new tax arrangements, and on arrangements dating back two years, as a check on aggressive tax planning.

But the coronavirus pandemic “hampered timely compliance” with the deadlines, justifying extensions, the council said in a statement.

In addition to the optional six-month deadline, the Council could extend, depending on how the coronavirus outbreak develops, the deferral period for up to three more months, the statement said.

The extensions mean deadlines will now fall in early 2021, but it isn’t clear which countries will exercise the option of allowing later reporting.

The council’s approval is “an excellent step” because even before coronavirus, “there was concern across the EU countries that the deadline was challenging, given the retrospective reporting obligation,” said Vesko Petkov, a partner with accountants Mazars in Birmingham.

EU countries also reached a preliminary agreement on postponing by six months the application of the value-added tax regime applicable to online companies—as of July 1, 2021, instead of Jan. 1, 2021. The postponement will be formally adopted by the council after a legal review, the council statement said.

Check out Bloomberg Tax’s country-by-country roadmaps covering direct and indirect tax developments.

To contact the reporter on this story: Stephen Gardner in Brussels at correspondents@bloomberglaw.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Vandana Mathur at vmathur@bloombergtax.com