Information on DAC6 rules
What is DAC6 Regulation?
The European Union has adopted number of rules to promote tax administrative cooperation between Member States with a view to creating tax transparency. Directive 2018/822/EU was in this context designed to reduce the use of aggressive cross-border tax planning arrangements.
The Directive imposes an information filing obligation to the tax authorities to be fulfilled in relation to certain potentially aggressive cross-border tax planning arrangements with a view to eliminating tax loopholes on the basis of information filed by a legislative amendment or carrying out tax audits.
The rules of the Directive are laid down in chapter V/F. of Act XXXVII of 2013 on certain rules for international administrative cooperation on tax and other public burdens (Aktv.) into the Hungarian legal system.
The purpose of the Directive is to deter taxpayers from using such arrangements by creating an information filing obligation.
What obligations should be fulfilled under the DAC6 regulations?
The DAC6 regulation defines potentially aggressive cross-border tax planning arrangements on the basis of so-called hallmarks. The hallmarks are set in the annex 4. to Aktv.
The information filing obligation shall be placed on those who designs, markets, organises or makes available for implementation or manages the implementation of a reportable cross-border arrangement. It also means any person that, having regard to the relevant facts and circumstances and based on available information and the relevant expertise and understanding required to provide such services, knows or could be reasonably expected to know that they have undertaken to provide, directly or by means of other persons, aid, assistance or advice with respect to designing, marketing, organising, making available for implementation or managing the implementation of a reportable cross-border arrangement or of a hallmark set in Annex 4 to Aktv.
Our bank may be considered as intermediary in tax planning in connection with an order (transaction) that our client wants to execute. In connection with the fulfilment of the legal obligation, our bank examines the information available to us about its customers and the transactions they plan to carry out in the ordinary course of business. If, as a result of our Bank's professional assessment, it determines that a customer fulfills a hallmark and our Bank is considered to be a intermediary to tax planning in this regard, our Bank will comply with the information filing obligation under Aktv.
The information filing obligation shall be fulfilled within 30 days of the occurrence of the event specified in the Aktv.
According to Aktv. the Bank would have to comply with the obligation to file information to the Hungarian Tax Authority (NAV). However, as the Bank is obliged to keep bank secrecy, insurance secrecy or securities secrets, so according to the Aktv. we shall notify the client in place of NAV. Due to the confidentiality rules, only the customer concerned will be notified, not anybody else. The customer concerned by the notification must comply with the information filing obligation to NAV. More information on the rules on information filing is available on nav's website (www.nav.gov.hu)
If you have any questions about the notification, please contact your bank contact.