Key Takeaways
- DAC6 requires disclosure of cross-border arrangements meeting one or more hallmarks across five categories (A through E) to national tax authorities.
- Non-compliance penalties reach up to EUR 870,000 in the Netherlands and up to EUR 25,000 per violation in Germany.
- The reporting obligation falls first on intermediaries (tax advisers, accountants, auditors, banks) and shifts to the taxpayer only when no intermediary exists or legal privilege applies.
- By November 2024, over 60,700 arrangements had been submitted to the EU's DAC6 Central Directory.
What is DAC6 (Mandatory Disclosure Rules)?
DAC6 entered into force on 25 June 2018, with reporting obligations applying from 1 July 2020. Any cross-border arrangement involving at least two EU member states (or one EU member state and a third country) must be assessed against five categories of hallmarks. Categories A, B, and part of C require the main benefit test to be satisfied: the arrangement is reportable only if obtaining a tax advantage was one of its main benefits. Categories D and E (covering automatic exchange of information and transfer pricing) trigger reporting without a main benefit test.
The intermediary bears the primary filing obligation. The directive defines "intermediary" broadly to include anyone who designs, markets, organises, or manages a reportable arrangement, or who provides assistance or advice in doing so. That definition captures tax advisers, accountants performing advisory work, notaries, and banks. When the intermediary invokes legal professional privilege (limited to lawyers following the CJEU's 2024 ruling in Case C-623/22), or when no EU-based intermediary is involved, the reporting obligation shifts to the taxpayer. The filing deadline is 30 days from the earlier of the date the arrangement is made available for implementation or the date the first step of implementation occurs. National tax authorities then exchange the reported data through the EU's Central Directory, complementing the transparency mechanisms in the Wwft anti-money-laundering framework and the OECD's country-by-country reporting regime.
Worked example: Groupe Lefevre S.A.
Client: Belgian holding company, FY2025, revenue EUR 185M, IFRS reporter. Groupe Lefevre owns a Dutch subsidiary (Lefevre Benelux B.V.) and a Luxembourg financing entity (Lefevre Finance S.a r.l.).
Step 1 — Identify the cross-border arrangement: In Q2 2025, Groupe Lefevre restructures its intercompany financing. Lefevre Finance S.a r.l. grants a EUR 12M loan to Lefevre Benelux B.V. at an interest rate of 1.2%. The interest is deductible in the Netherlands and received in Luxembourg, where Lefevre Finance benefits from the IP box regime, resulting in an effective tax rate of 5.2% on the interest income.
Documentation note: record the arrangement, the jurisdictions involved (Belgium, Netherlands, Luxembourg), the parties, the financial terms, the contractual date, and the date the arrangement was made available for implementation.
Step 2 — Assess hallmark applicability: The engagement team's tax adviser evaluates the arrangement against DAC6 hallmarks. Hallmark C.1(b)(i) applies: a deductible cross-border payment between associated enterprises where the recipient is resident in a jurisdiction that subjects the income to a preferential tax regime. Because Hallmark C.1 does not require the main benefit test, the arrangement is reportable regardless of the commercial rationale.
Documentation note: record the hallmark assessment, identify C.1(b)(i) as the triggered hallmark, note that the main benefit test is not required for this category, and retain the analysis showing which hallmarks were considered and dismissed.
Step 3 — Determine who reports: Groupe Lefevre's external tax adviser (a Belgian firm) designed the financing structure. As the intermediary, the tax adviser bears the primary reporting obligation and must file with the Belgian tax authority within 30 days. If the tax adviser were a lawyer invoking legal privilege, the obligation would shift to Groupe Lefevre itself. The engagement auditor is not the intermediary here (the auditor did not design or advise on the arrangement) but must evaluate whether the arrangement creates an uncertain tax position affecting the tax provision.
Documentation note: record who qualifies as the intermediary, the filing jurisdiction, the 30-day deadline, and confirmation that the auditor assessed the arrangement's impact on the deferred tax and current tax balances under IFRIC 23.
Step 4 — Evaluate audit implications: The auditor considers whether the Luxembourg IP box treatment is sustainable and whether the arm's length principle applies to the 1.2% interest rate. If the Dutch tax authority challenges the deduction, Lefevre Benelux B.V. faces a potential adjustment of EUR 144K annually (EUR 12M at a market rate differential). The auditor assesses whether an IFRIC 23 provision is required.
Documentation note: record the tax risk assessment, the potential exposure quantification, management's response to the identified risk, and the conclusion on whether the current and deferred tax balances require adjustment per IAS 12.5 and IFRIC 23.8.
Conclusion: the approach is defensible because the team identified the reportable hallmark, confirmed the intermediary's filing obligation, quantified the tax exposure, and evaluated the IFRIC 23 implications independently from the DAC6 disclosure requirement.
What reviewers and practitioners get wrong
- Practitioners at mid-market firms frequently assume DAC6 applies only to aggressive tax planning. Hallmark Category E (transfer pricing arrangements involving hard-to-value intangibles or unilateral safe harbours) and parts of Category C (cross-border payments to low-tax jurisdictions) trigger reporting without a main benefit test. Routine intercompany financing or IP licensing between EU entities can be reportable if the structural conditions are met. Failure to screen ordinary group transactions against the hallmarks is the most common compliance gap.
- Auditors sometimes overlook their own potential intermediary status. The directive's definition of "intermediary" extends to anyone providing "aid, assistance, advice, or management" with respect to a reportable arrangement. An auditor who advises on the structuring of a cross-border transaction (as opposed to auditing it after the fact) may fall within scope. The distinction between advisory involvement and assurance involvement must be documented when the firm provides both audit and non-audit services to the same group.
Related terms
Frequently asked questions
Does DAC6 apply to arrangements with non-EU countries?
Yes. An arrangement involving one EU member state and a third country is within scope if an EU-based intermediary or EU-resident taxpayer is involved. The hallmark assessment applies identically. The key requirement is that at least one party has a connection to an EU member state through tax residence or intermediary location. Article 3(18) of the amended Directive 2011/16/EU defines the geographic scope.
What is the main benefit test under DAC6?
The main benefit test is satisfied when obtaining a tax advantage is one of the main benefits of the arrangement (not necessarily the only benefit). It applies to Hallmark Categories A, B, and part of C. For Categories D and E, no main benefit test is required. The test examines whether the tax advantage is more than merely incidental, considering all relevant facts and circumstances. Article 3(19) of the directive defines a "cross-border arrangement" and Annex IV, Part I sets out the main benefit test criterion.
Can an auditor be classified as an intermediary under DAC6?
An auditor performing a statutory audit is not an intermediary, because the audit itself does not constitute designing, marketing, organising, or advising on a cross-border arrangement. However, if the same firm provides tax advisory services that involve structuring or recommending a reportable arrangement, the firm becomes an intermediary for that advisory engagement. The distinction depends on the nature of the service, not the professional title. Firms providing both audit and tax advisory services to the same client must assess intermediary status engagement by engagement.