On 24 June, the EU Council announced that it had adopted by written procedure an amending directive to DAC 6 providing an optional six-month delay to the reporting deadlines due to the disruption caused by the pandemic. This follows European Parliament approval received on 19 June.
The delegated directive also provides for the possibility of the EU Council unanimously agreeing to one further extension for a maximum additional three months.
Each Member State has now to confirm whether it wishes to enact the deferral. It was widely reported that Finland will not, but the vast majority are expected to defer. In response HM Revenue and Customs (HMRC) has confirmed that the UK is taking up the option and that the government will amend the UK Regulations that implement DAC 6 to give effect to this. The amended Regulations may not be in force by 1 July 2020, but HMRC confirm that no action will be taken for non-reporting during the period between 1 July and the date the amended Regulations come into force, so that there is no expectation that reports will be made in July.
The Law Society had been stating that there is a strong case for deferral of DAC 6 in current circumstances given the burden it’ll place on both private and public sectors (including law firms) so we welcome this development. However, this is a delay and not a cancellation of reporting requirements and the optional nature of the new proposal could still lead to mismatches and complexity, so law firms may be well-advised to continue their work preparing for DAC 6 compliance.