CFE Tax Advisers Europe has published an Opinion Statement concerning the EU Commission evaluation of the Directive on Administrative Cooperation in the field of taxation in The European Union Union (“DAC” – Directive 2011/16/EU).
The EU Directive on Administrative Cooperation in the field of taxation (2016/16/EU), “DAC”, is the key instrument of the European Union for exchange of tax-related information and cooperation among revenue administrations of Member states in the area of direct taxation. The overall objective is to provide tools to better fight tax evasion and fraud, and to contribute to better assessment and overview of arrangements that fall within scope of the directive through exchange of relevant information among tax administrations.
CFE’s comments focus on DAC6, the iteration of the Directive that introduces mandatory disclosure rules in the European Union. CFE Tax Advisers Europe participated in the European Commission high-level consultation in 2023 focusing on interviews with various stakeholders. This submission aims to reinforce the assessment provided to the European Commission, with an aim to simplify and unify the DAC directive, evaluate the compliance burden, and identify effective and ineffective aspects of DAC.
We believe that the European Commission should use this opportunity to evaluate whether the rules are still fit for purpose and proportionate, and to explore policy options that could simplify the rules overall. Our overall aim is to support policy-makers in achieving the objectives above while ensuring that secondary EU law and reporting obligations are proportionate and do not over-burden businesses or advisers, thereby undermining the policy goals of such initiatives and ultimately the competitiveness and the resilience of the Single Market.
CFE in its statement identifies issues and makes recommendations surrounding:
- General Simplification of the Directive & Recast of Consolidated Version;
- Transparency of Reporting;
- Pillar 2 Compatibility;
- Professional Privilege;
- Revision of Hallmarks – Broad Hallmarks & Commercially Valid Transactions;
- Penalties;
- Taxpayers Rights – Overall Balance of Rights and Obligations in the Single Market.