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Zuzana Kalincová | December 1, 2020
In this article, we would like to draw your attention to the fact that at the end of August, an act implementing Council Directive (EU) 2018/822 (the so-called DAC 6 Directive) in the Czech legal system was promulgated. This directive implements a reporting obligation in relation to information on potentially aggressive cross-border tax-planning arrangements.
Reported information
The reporting obligation relates to cross-border arrangements implemented as of 25 June that contain at least one hallmarks set out in the directive.
The term arrangement includes:
A cross-border arrangement is an arrangement, which:
The reporting obligation does not apply to strictly national arrangements.
A hallmark is understood to mean:
Persons obliged to report information
An obliged person for the purposes of announcing a cross-border arrangement is especially its intermediary, i.e. usually a consultant, who suggests the reported cross-border arrangement, offers it on the market, organises or enables its implementation, or manages the implementation of such an arrangement.
To the extent, to which intermediaries (attorneys, tax consultants, notaries and auditors) are bound by statutory professional privilege, however, the taxpayer himself must fulfil the reporting obligation. The same rule applies even in a situation, when the cross-border arrangement has no intermediary.
Essentials of the reporting
The report on cross-border arrangements will be submitted electronically by means of a form published by the Financial Administration of CR.
Deadline for meeting the reporting obligation
Date of cross-border arrangement |
Deadline for announcing cross-border arrangement |
25 June 2018 to 30 June 2020
|
28 February 2021 |
1 July 2020 to 31 December 2020
|
30 January 2021 |
From 1 January 2021 |
Within 30 days from the day this arrangement was made available for implementation or when the first step for implementation of this arrangement was taken |
Sanctions
In case of failure to comply with the reporting obligation, the tax administrator may impose a disciplinary fine reaching up to CZK 500,000 on the obliged entity.
Offer of our service
It is clear from the above-mentioned information that the reporting obligation may apply to a significant range of various cross-border transactions performed by multinational enterprises almost on daily basis.
With regard to the amount of potential sanctions and the application of similar rules within the European Union, we recommend paying increased attention both to transactions performed since June 2018 and those planned in the future.
For the purpose of avoiding potential sanctions and related consequences, we will be happy to help you assess performed and planned transactions, so that any potential risk would be duly and timely identified and minimised.
As part of our services, we will perform a detailed analysis of transactions, for which the reporting obligation may apply, and in case of identifying an obligation to report a cross-border transaction we will prepare and subsequently submit a report about this arrangement to the respective state authorities.
If you are interested or you have any questions about this topic, please, do not hesitate to contact us.