TAG Tax

International Tax Bulletin

TAX TRANSPARENCY INCREASES IN INTERNATIONAL TAXATION, NEW REPORTING REQUIREMENTS ARE OBTAINED WITH THE CROSS-BORDER REPORTING OBLIGATIONS (DAC6).

The dynamics of international taxation is in a great transformation, especially in recent years, through the practices put into effect by tax authorities one after another. While this situation naturally causes groups that have been structured abroad for a long time to change their practice for years and to restrict the movement area with the additional obligations imposed. For potential entrepreneurs who are planning to invest abroad for the first time, it is added new question marks in their minds, while additional cost items to be paid to business partners in the target countries occur.

In one way or another, the basic truth is now that nothing will be the same in the international tax axis and the field of movement which was quite large in the old times will obviously begin to be restricted slowly, with each mandatory reporting obligation introduced within the principle of 'transparency in taxation'. We will witness how this will cause investors to change their action plans over time, but these additional obligations are expected to lead to revising international structures and simplification in these structures in line with the needs and targets in the first place.

While the dynamics of international taxation are changing radically, we would like to publish a bulletin on Directive 2011/16 / EU on mandatory automatic exchange of information in the field of taxation in relation to reportable cross- border arrangements, which is also known as DAC6 (Directive of Administrative Cooperation), explaining what changes await investors who have investments in the European Union geography or people who are planning to invest in this region. In this series of articles, we will elaborate on the studies for transparency in international taxation, what DAC6 means, what changes it will bring, and what will be included in the scope of reporting in detail.

Before we get into the details, let's make a final note about the implementation calendar of DAC6: In the meeting held by the commision of European Union member countries (Coreper) on June 3, 2020, a maximum 6-month delay from the first planned calendar for the DAC6 reporting was proposed.

While we prepared this article series, we got the information that the European Parliament also voted in favor of this postponement proposal on 19 June 2020. Beginning of the reporting period, 1 July 2020 on the regular calendar, will be postponed for sure, while which member states will continue with the determined first calendar and which member countries will tend to postpone these dates will become clear in the coming days. However, the unchanging truth is that, even after 6 months at the latest, the inevitable transformation in international taxation will be mandatory, and cross-border reporting obligations will enter our lives very soon.

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