Directive DAC 6: Reminder about mandatory disclosure

Directive DAC 6: Reminder about mandatory disclosure

Directive DAC 6: Reminder about mandatory disclosure 550 367 Exponens International

Directive DAC 6: Reminder about mandatory disclosure

Published on 03/03/2021

The “directive DAC 6” aims to strengthen transparency and the fight against tax fraud and tax evasion by establishing a mandatory report, by the intermediaries or, where applicable, the taxpayers, of cross-border arrangements considered as potentially aggressive to the tax authorities. The reports are then subject of an automatic exchange of information between Member States of the European Union.

The French ordonnance No. 2019-1068 of October 21, 2019 concerning the automatic and compulsory exchange of information in the tax field in connection with cross-border arrangements requiring return (known as “DAC 6”), which implements Directive (EU) 2018/822 of May 25, 2018, has been codified in France in articles 1649 AD to 1649 AH of the French tax code (FTC). In November 2020, the French tax administration published the final comments concerning these new rules (BOI-CF-CPF-30-40 and following) and refocused the mandatory report issue on direct taxations (excluding questions concerning VAT, tax customs and social security contributions).

What is an arrangement?

The term “arrangement” covers a wide sense: it covers any agreement, understanding, mechanism, transaction or series of transactions, whether or not they are enforceable. The term arrangement aims the constitution, acquisition or dissolution of a legal person, or the subscription of a financial instrument. An arrangement can be a marketable arrangement – without the need of adaptation – or a custom-made arrangement – regardless of the complexity of the arrangement. An arrangement can have one or more steps, involve one or more participants and it can be made up of a series of arrangements. It is therefore impossible to split the arrangement to avoid its qualification (article 1649 AD of the FTC – BOI-CF-CPF-30-40-10-10).

What is a cross-border arrangement?

An arrangement is deemed to be cross-border when the following two cumulative conditions are met:
– The arrangement involves France and another State, in EU or outside EU – excluding purely French arrangement.
– The cross-border nature of an arrangement also implies a condition of residency or activity in two distinct States by the participants in the arrangement (intermediaries, taxpayers, or related companies).

Examples of cross-border arrangements (BOI-CF-CPF-30-40-10-10-25 / 11/2020 n ° 80):
– “A company established in France (buyer) purchase from a French company (seller) 50% of the shares of a company established in Finland.”
– “A company established in France signs a loan with a company established in Germany and pays interest to the creditor, the German company.”

What is a reportable cross-border arrangement?

The mandatory reporting covers any cross-border arrangement including at least one “hallmark“. A hallmark is a characteristic or feature of a cross-border arrangement, which indicates a risk of tax evasion. There are two types of hallmarks. Firstly, some so-called “double” hallmarks (category A, B or C) are only considered when the main benefit test is satisfied. This test is satisfied if the main benefit that a person can reasonably expect to obtain from an arrangement is obtaining a tax advantage. So, with a double hallmark, you must have a hallmark and a tax advantage. Secondly, hallmarks are so-called “simple” hallmarks. The identification of the hallmark is sufficient to trigger the mandatory report of the cross-border arrangement.

Warning: the hallmark is not satisfied if you are seeking a tax advantage resulting from tax incentives provided by the law and its spirit (article 1649 AH of the FTC – BOI-CF-CPF-30- 40-10-10 & BOI-CF-CPF-30-40-30 and following).

Who is liable for the report?

In principle, the mandatory report in France is made by the intermediary who has a territorial link with France (head office, tax residence, permanent establishment, submission to French law, registration with an Order, etc.). The intermediary is the promoter / designer, the one who designs, markets, or organizes an arrangement, makes it available or manages its implementation. But it is also the service provider / knowing, the one who provides help, assistance or advice regarding the design, marketing or organization of a reportable cross-border arrangement or the management of its implementation.


On the other hand, an intermediary who acts or becomes aware of the reporting cross-border arrangement after its implementation is not subject to a reporting obligation. The intermediary is also exempt from the transmission of information when the report has already been taken out by another intermediary or when the intermediary is subject to professional secrecy and has not obtained the agreement of his customer to declare information.


As an exception, the reporting obligation in France falls to the taxpayer if no intermediary has made a declaration in the EU (art 1649-AE and 1649-AF of the FTC – BOI-CF-CPF-30-40-10- 20).

How quickly do you have to report?

The report must be done within 30 days of the provision or implementation of the arrangement (article 1649 AG of the FTC – BOI-CF-CPF-30-40-20).

In the context of the health crisis, the French authorities have postponed the implementation of the reporting system:

  • Cross-border arrangements for which the first stage was implemented between June 25, 2018 and June 30, 2020 must be declared before February 28, 2021.
  • The 30-days deadline runs from January 1, 2021 for arrangements for which the triggering event occurred between July 1, 2020 and December 31, 2020.

What are the penalties for intermediaries or taxpayers?

Missing report is liable for a fine which cannot exceed € 10,000 or € 5,000 for the first offense during the current calendar year and the three preceding years. The amount of the fine applied to the same intermediary or to the same taxpayer may not exceed 100,000 per calendar year (1729 C ter of the FTC – BOI-CF-CPF-30-40-20).

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