Personal scope of application As per 26 June 2022

Are there any deviations from the Directive in defining the intermediary?

2021/06/17

No.

How is an intermediary defined? Is there a differentiation between a corporate entity and an individual person?

2021/06/17

An Intermediary is any personthat:1. Designs, markets, organises or makes available forimplementation or manages the implementation of a reportablecross-border arrangement;2.Having regard to the relevant facts and circumstances and basedon available information and the relevant expertise andunderstanding required to provide such services, knows or couldbe reasonably expected to know that such a person has undertakento provide, directly or by means of other persons, aid, assistanceor advice with respect to designing, marketing, organising,making available for implementation or managing theimplementation of a reportable cross-border arrangement.An Intermediary is also a person thatmeets at least one of the following conditions:1. Is a resident for tax purposes in a Member State;2. Has a permanent establishment in a Member Statethrough which the services with respect to the arrangement areprovided;3. The person is incorporated in or governed by the laws of, aMember State;4. The person is registered with a professional association related tolegal, taxation or consultancy services in a Member State;

Can a corporate tax department (or its members) within a MNE or within a group of entities qualify as an intermediary?

2021/06/17

If there are no intermediaries that can report, the obligation will shift to the taxpayers. Under the draft Irish legislation, the definition of “intermediary” is in line with the Directive and there is no reference to employees of an entity or of an “in-house” tax team being regarded as an intermediary.

How are the actions of designing, marketing, organizing, making available for implementation or managing the implementation of a tax arrangement defined?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

Have the legal preconditions regarding the territorial nexus for an intermediary been implemented in accordance with the Directive?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

Are there any other conditions apart from those of the Directive, such as the territorial nexus of a tax arrangement to a certain Member State, which trigger a reporting obligation of an intermediary (e.g. including intermediaries from outside the EU)?

2021/06/17

No, the Irish rules do not extend further than what is contained in the Directive.

In which cases is the relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

If there are no intermediaries which can report, the obligation will shift to the taxpayers.Intermediaries availing of the LPP exemption are however obliged to notify other intermediaries or, if there is no other intermediary, to notify other relevant taxpayers, without delay, of their reporting obligations. There is no clarification on how the expression “without delay” is to be interpreted.

Are there any other persons beside intermediaries or relevant taxpayers obliged to report?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

Are there any deviations from the Directive in defining the relevant taxpayer?

Mechanism to avoid multiple reporting

Which measures have been taken to avoid multiple reporting obligations referring to an intermediary obliged to report in several countries? Are there deviations from the Directive?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

Which measures have been taken to avoid multiple reporting obligations referring to more than one intermediary obliged to report? Are there deviations from the Directive?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

Which measures have been taken to avoid multiple reporting obligations referring to a relevant taxpayer obliged to report several countries? Are there deviations from the Directive?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

Which measures have been taken to avoid multiple reporting obligations referring to more than one relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

How does the National Tax Authority expect the conditions for exemption from filing a report to be met?

2021/06/17

Guidance notes are yet to published by the Revenue Commissioners but we would expect that this is an area that will be addressed within the guidance notes.

Material scope of application

Are national tax arrangements subject to reporting under the Directive?

2021/06/17

No, as the legislation has been transposed, cross-border arrangements are defined as arrangements concerning more than one Member State or a Member State and a third country.

Which taxes are affected? Are there deviations from the Directive?

2021/06/17

No deviations from the Directive. This disclosure regime applies to all taxesexcept for value-added tax (VAT), customs duties, excise duties and compulsory social security contributions.

Does the hallmark catalogue deviate from the Directive? If yes, to what extent?

2021/06/17

No deviations from the directive.

Which hallmarks are linked with the main benefit test?

2021/06/17

Most elements of the hallmarks included in DAC6 are not expressly defined. The Irish draft legislation refers directly back to Annex IV of the Directive. It is expected that further explanatory notes will be provided with some clarificationon these elements.

How is the main benefit test defined?

2021/06/17

In accordance with DAC6, the Main Benefit Test will be satisfied if it can be established that “the main benefit or one of the main benefits which, having regard to all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement, is the obtaining of a tax advantage.”A tax advantage is defined in the legislation as any ofthe following:1. Relief or increased relief from, or a reduction, avoidance or deferral of, any assessment, charge or liability to tax, including any potential or prospective assessment, charge or liability;2. A refund or repayment of, or payment of, an amount of tax, or an increase in an amount of tax refundable, repayable or otherwise payable to a person, including any potential or prospective amount so refundable, repayable or payable, or advancement of any refund or repayment of, or payment of, an amount of tax to aperson;3. The avoidance of any obligation to deduct or account for tax, arising out of or by reason of an arrangement, including an arrangement where another arrangement would not have been undertaken or arranged to achieve the results, or any part of the results, achieved or intended to be achieved by the arrangement. This broad definition sets out an objective test for the tax advantage, in contrast to the definition of the same term under the existing domestic MDR in Ireland where a tax advantage is considered obtained only if a person purportedly would not have entered into a transaction, in its current form, if the possibility of this tax advantage had not been there.

How is a tax advantage defined?

2021/06/17

In accordance with DAC6, the Main Benefit Test will be satisfied if it can be established that “the main benefit or one of the main benefits which, having regard to all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement, is the obtaining of a tax advantage.”A tax advantage is defined in the legislation as any ofthe following:1. Relief or increased relief from, or a reduction, avoidance or deferral of, any assessment, charge or liability to tax, including any potential or prospective assessment, charge or liability;2. A refund or repayment of, or payment of, an amount of tax, or an increase in an amount of tax refundable, repayable or otherwise payable to a person, including any potential or prospective amount so refundable, repayable or payable, or advancement of any refund or repayment of, or payment of, an amount of tax to aperson;3. The avoidance of any obligation to deduct or account for tax, arising out of or by reason of an arrangement, including an arrangement where another arrangement would not have been undertaken or arranged to achieve the results, or any part of the results, achieved or intended to be achieved by the arrangement. This broad definition sets out an objective test for the tax advantage, in contrast to the definition of the same term under the existing domestic MDR in Ireland where a tax advantage is considered obtained only if a person purportedly would not have entered into a transaction, in its current form, if the possibility of this tax advantage had not been there.

Are there any deviations from the Directive in defining a cross-border arrangement?

Is there a white list defining arrangements explicitly excluded from a reporting obligation? If yes, please provide details.

Are there any deviations from the Directive in defining associated enterprises?

Reporting process

When is a cross border arrangement made available for implementation (e.g. handover of contract documents)?

2021/06/17

TBC

When is a cross-border arrangement ready for implementation?

2021/06/17

TBC

When has the first step in the implementation of a cross-border arrangement been made?

2021/06/17

TBC

Which information should be included in the report? Are there deviations from the Directive?

2021/06/17

Information in relation to the identity of each intermediary andrelevant taxpayer, including:1. The name of each such intermediary and relevant taxpayer;2. Whether each such intermediary and the relevant taxpayer is anindividual or entity;3. The date and place of birth (in the case of an individual) of eachsuch intermediary and relevant taxpayer;4. The residence for tax purposes of each such intermediary andrelevant taxpayer;5. The taxpayer identification number of each such intermediaryand relevant taxpayer;6. The country of issuance of the taxpayer identification number ofeach such intermediary and relevant taxpayer;7. If the information referred to in either or both subparagraph 5or 6 is not known to the person who is required to make areturn under this Chapter of the specified information, theaddress of each such intermediary and relevant taxpayer;8. Where appropriate, the persons that are associated with enterprises toeach such relevant taxpayer;9. Details of each hallmark that makes the cross-border arrangementreportable;10. A summary of the content of the reportable cross-borderthe arrangement, including the name by which it is commonly known,if any, and description in abstract terms of the relevant businessactivities or arrangements, without leading to the disclosure of acommercial, industrial or professional secret or of a commercialprocess, or of information the disclosure of which would becontrary to public policy;11. The reference number assigned to the reportable cross-borderthe arrangement, if any;12. Details of the national provisions that form the basis of thereportable cross-border arrangement;13. The value of the reportable cross-border arrangement;14. The date on which the first step was taken or will be taken inimplementing the reportable cross-border arrangement;15. The identification of the Member State of each such relevanttaxpayer and any other Member States which are likely to beconcerned by the reportable cross-border arrangement;16. The identification of any other person in a Member State likely tobe affected by the reportable cross-border arrangement, indicatingto which Member States such person is linked.

What does the reporting process look like? Are there deviations from the Directive?

2021/06/17

None as of yet but awaiting confirmation.

Is the entire report to be provided by the intermediary/relevant taxpayer? Who must provide the report?

2021/06/17

The intermediary.

What are the respective deadlines for the intermediary and the relevant taxpayer to file the report? Are there deviations from the Directive in terms of filing the information within 30 days?

2021/06/17

No deviations from the Directive.

Which numbers are assigned by local tax authorities to the cross-border arrangements?

2021/06/17

Reference numbers as outlined in the questions above.

What is the reporting deadline for arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020?

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies between 1 July 2020 and 31 December 2020?

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies after 1 January 2021?

Penalties

In which cases are penalties imposed?

2021/06/17

1. Where an intermediary or relevant taxpayer fails to report an arrangement within the 30-day reporting period: Up to €500 per day per arrangement;2 (a). Where an intermediary or relevant taxpayer fails to meet their obligations under the transitional provisions for arrangements implemented before 1 July 2020;2 (b). Where an intermediary fails to meet its obligations relating to a marketablearrangement or as a result of a claim for LPP: Up to €4,000 per arrangement;If 2(a) and 2(b) continue after a penalty is imposed: €100 per day per arrangement.3. Where a taxpayer fails to include the reference number assigned to a reportablecross-border transaction in its annual tax return: Up to €5,000.

What are the penalties?

2021/06/17

1. Where an intermediary or relevant taxpayer fails to report an arrangement within the 30-day reporting period: Up to €500 per day per arrangement;2 (a). Where an intermediary or relevant taxpayer fails to meet their obligations under the transitional provisions for arrangements implemented before 1 July 2020;2 (b). Where an intermediary fails to meet its obligations relating to a marketablearrangement or as a result of a claim for LPP: Up to €4,000 per arrangement;If 2(a) and 2(b) continue after a penalty is imposed: €100 per day per arrangement;3. Where a taxpayer fails to include the reference number assigned to a reportablecross-border transaction in its annual tax return: Up to €5,000.

Is a distinction made between penalties imposed on intermediaries/relevant taxpayers/other persons obliged to report?

2021/06/17

No distinction. The same penalty applies.

What are the penalties in case of redundant reports? A redundant report is a report, which was filed, although there is no obligation to file one.

2021/06/17

There has been no reference to this in the legislation.

Do the penalties differ with regard to incomplete, incorrect, missing or late reports? Are there any gradations?

2021/06/17

There is no specific reference to incomplete, incorrect but it would appear they fall within fail to report within a 30 days reporting period.

Are arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 treated differently in the means of penalties?

Other aspects

Do already other reporting regimes on cross-border arrangements exist?

2021/06/17

Yes Ireland already has a mandatory disclosure regime.

Are there any other special deviations from the Directive? 

2021/06/17

No specific deviations of importance.

What is the name of the national Tax Authority responsible for DAC6?

Do any other obligations apart from reporting a reportable cross-border arrangement exist under the national DAC6 legislation? (i.e. indication of the arrangement in the tax return)

Professional privilege/secrecy

Who is primarily obliged to report? Is there a primary reporting obligation of the intermediary or the relevant taxpayer? Is there legal privilege and in how far has it been considered for allocating the reporting obligation?

2021/06/17

As noted, The Directive gives Member States the option to exempt intermediaries from the obligation to report where the reporting obligation would breach legal professional privilege (LPP). If there are no intermediaries that can report, the obligation will shift to the taxpayers.Under the draft Irish legislation, the definition of “intermediary” is in line with the Directive and there is no reference to employees of an entity or of an “in-house” tax team being regarded as an intermediary. The Irish draft legislation exempts intermediaries from reporting information with respect to which a claim to LPP could be maintained in legal proceedings. However, tax advisors, auditors, and accountants, who cannot claim LPP, are required to report.Intermediaries availing of the LPP exemption are however obliged to notify other intermediaries or, if there is no other intermediary, to notify other relevant taxpayers, without delay, of their reporting obligations. There is no clarification on how the expression “without delay” is to be interpreted.

Does the reporting obligation breach a legal professional privilege under national law?

2021/06/17

If LPP is claimed, then the intermediary claiming privilege must notify all other intermediaries and if there are no intermediaries the reporting falls to the taxpayer.

Does the national law make reference to professional privilege or professional secrecy?

What is the difference, as per the national law, between professional privilege and professional secrecy?

To which categories of intermediaries does the professional privilege or professional secrecy apply?

In the context of the reporting obligation, under which conditions are the intermediaries entitled/obliged to make use of professional privilege or professional secrecy?

In cases in which professional privilege or secrecy applies, please describe the procedure for notification.

Does the national law provide specific conditions to waive professional privilege or professional secrecy?

Cormac Kelleher
Partner