Reportable cross-border tax planning arrangement
On 8 May 2020, the Commission has proposed a number of amendments to the DAC6 Directive governing reportable cross-border arrangements.
Deadlines and the layout of the reporting schedule are adjusted. The Tax Administration is aware of these changes, and we will update our guidance and information accordingly as the amendments go into effect.
The Act on the Reporting Obligation for Cross-Border Tax Planning Structures entered into force at the beginning of 2020. The Act is based on the European Union's DAC6 Directive concerning cross-border arrangements, which entered into force on 25 June 2018. The aim of the Directive is to increase transparency in taxation and deter aggressive tax planning.
The reporting obligation primarily concerns so-called service providers who participate in planning, marketing or implementing an arrangement. Service providers may be, for example, tax consultants and attorneys, financial sector operators and parent companies of groups.
Taxpayers are obliged to report arrangements only when an arrangement does not involve a service provider with a reporting obligation, or the service provider has the right to a waiver due to legal professional privilege.
The first reports will be submitted in July 2020.
What is a reportable arrangement?
The reporting obligation applies to tax planning structures in which the parties to an arrangement are from more than one Member State and the arrangement includes at least one of the distinguishing hallmarks defined in the Act. A distinguishing hallmark is an attribute or characteristic that indicates tax avoidance.
In addition some of the hallmarks are also subject to the main benefit test. The test determines if obtaining a tax advantage is the main purpose or one of the main purposes of the arrangement.
What information must be reported?
Reportable information consists of the identification details of the persons and companies involved in the arrangement and information on the reportable arrangement, such as a description of the arrangement and the national provisions of which it takes advantage.
Finland exchanges reportable information with the other EU Member States on the basis of the Directive. The exchange of information enhances tax control and makes tax evasion more difficult.
When should the report be submitted?
The reporting obligation concerns arrangements implemented as of the entry into force of the Directive on 25 June 2018.
- Arrangements implemented between 25 June 2018 and 30 June 2020 must be reported at the latest by 31 August 2020.
- As of 1 July 2020, reports must be submitted within 30 days of an arrangement exceeding the reporting threshold.
An electronic reporting channel is to be opened in July.
You can send your questions concerning notification of reportable arrangements to the e-mail address raportoitavatjarjestelyt(a)vero.fi. Please note that the e-mail connection is not encrypted. If you want to use an encrypted connection, send us an e-mail requesting encryption before sending any other information.
Instructions will be published during the spring:
- Reportable cross-border arrangements, detailed guidance (only available in Finnish and Swedish)
DAC6 – Notification of a reportable arrangement, data record specification
Notifying of a reportable arrangement, instructions for filling in the form