DAC6

What is DAC6?

DAC6 (Directive on Administrative Cooperation, sixth amendment) is an EU directive requiring the disclosure of cross-border tax arrangements that could be used to avoid tax. It applies to intermediaries (such as tax advisors, accountants, and lawyers) and, in some cases, taxpayers themselves.

Why does DAC6 matter?

DAC6 was introduced to enhance transparency and tackle aggressive tax planning across EU member states. By mandating the reporting of potentially harmful arrangements, tax authorities can better detect and respond to risks to their tax bases.

Organizations that operate across borders—especially those with complex structures or transactions—must be aware of DAC6 to stay compliant and avoid potential penalties.

DAC6 requires certain intermediaries—such as tax advisors, accountants, lawyers, or banks—to report cross-border arrangements that meet specific risk indicators, known as hallmarks, to their national tax authorities. In some cases, the obligation may shift to the taxpayer.

By making these arrangements visible to authorities, DAC6 enables tax administrations across the EU to share data, coordinate enforcement, and respond faster to risks to their tax bases.

Failure to comply with DAC6 can lead to financial penalties and reputational damage, making it essential for organizations operating internationally to stay on top of their disclosure obligations.

What needs to be reported under DAC6?

A cross-border arrangement must be reported if it meets certain hallmarks set out in the directive. These hallmarks cover a range of characteristics, including:

• A link to tax benefits
• Use of standardized documentation
• Circular transactions or unclear beneficial ownership
• Cross-border transfers of assets or income

A reportable cross-border arrangement (RCBA) is one that involves more than one jurisdiction and meets at least one of five hallmark categories listed in Annex IV of the directive:

• A – Generic hallmarks (subject to “main benefit test”)
  Includes confidentiality clauses around tax benefits, success-based fees, or standardized tax schemes.
• B – Tax base erosion or income conversion (also subject to “main benefit test”)
  Such as acquiring companies to use their tax losses, converting income into lower-taxed forms, or circular fund movements.
• C – Cross-border transactions
  Includes payments to low/no tax jurisdictions, double deductions, or mismatches in asset valuation between jurisdictions.
• D – Transparency hallmarks
  Focuses on arrangements that obscure the beneficial ownership structure or circumvent reporting obligations, such as automatic exchange of financial account information.
• E – Transfer pricing
  Covers intra-group transfers of hard-to-value intangibles or business restructures that shift significant profits between jurisdictions.

Not all hallmarks require a tax advantage to be present, which means some arrangements must be reported even if they are not considered aggressive tax planning.

Who is responsible for DAC6 reporting?

In most cases, intermediaries—such as legal, financial, or tax advisors—are responsible for reporting. However, if no intermediary is involved (or bound by legal professional privilege), the obligation may fall to the taxpayer.

What is the reporting timeline?

DAC6 includes a 30-day window for reporting. Intermediaries or taxpayers must disclose a reportable arrangement within:

• 30 days after it is made available,
• 30 days after it is ready for implementation, or
• 30 days after the first step is taken.

How Impero supports DAC6 compliance

DAC6 compliance can be complex, especially with tight reporting timelines (often within 30 days of the arrangement being made available). Impero helps streamline the process by:

• Mapping out DAC6 obligations across jurisdictions
• Automating data collection and reporting workflows
• Ensuring clear accountability and audit trails
• Supporting collaboration between tax, legal, and compliance teams

Get started with Impero

Staying compliant with DAC6 doesn’t need to be a manual, high-risk task. With Impero, you gain visibility, control, and confidence over your tax governance processes.

👉 Get in touch to see how we can help your team stay ahead of regulatory requirements like DAC6.