A group of financial associations has asked the EU Commission to defer the DAC6 reporting obligation until 2021.
In their April 20 letter to Paolo Gentiloni, the EU Commissioner for Economic and Financial Affairs, the group sought the deferral on the ground that financial institutions currently face significant implementation challenges outside of their control, including most recently the COVID-19 pandemic.
The EU reporting obligation for cross-border arrangements (commonly known as DAC6) takes effect from July 1, 2020.
The letter notes that “the late enactment of domestic legislation by many member states and the lack of detailed guidance and reporting schema details, and the difference of interpretation of key notions between member states, timely implementation of the DAC6 reporting obligations was already challenging. This has now only been exacerbated by the pandemic.”
The letter adds: “These concerns are materially exacerbated by the pandemic, which is affecting all aspects of our members’ operations and also the ability of governments, tax authorities, other intermediaries and taxpayers to prepare for the start of the reporting obligation. The impact of the crisis on our members is severe due to a reduction in workforce available as a result of restrictions on movement and childcare requirements due to school closures.”
The letter continues: “In addition, IT resources have been redeployed to support the unprecedented business continuity programmes on a global scale. The primary focus of our members is to maintain their core client and regulatory responsibilities.”
The group requested the Commission to allow for the postponement of domestic reporting deadlines (i.e. deferral in the start date of July 1, 2020, and deferral in the retrospective reporting deadline of August 31, 2020) consistently across all member states and the United Kingdom.
The letter states that “some member states may be more severely hit by the COVID-19 pandemic than others and may have identified that they would need a longer delay, we would ask that the reporting deadlines be postponed until 2021.”
The letter was written by: the Alternative Credit Council, the Association for Financial Markets in Europe, the Alternative Investment Management Association, The European Association of Co-operative Banks, the European Banking Federation, EFAMA, the European Forum of Securities Associations, European Savings and Retail Banking Group, Insurance Europe, and Invest Europe.
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