DAC6 – delayed but be alert!
EU Directive 2018/822 of 25 May 2018 (mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements) amends for the sixth time Directive 2011/16/EU on administrative cooperation in the field of taxation (“DAC 6”) and requires the disclosure of information relating to certain cross-border arrangements (“CBA”).
The main objective of DAC 6 is to strengthen tax transparency and prevent what are considered to be harmful tax practices through the automatic exchange of information between the EU Member States on potentially aggressive tax planning. The UK Regulations will require any CBA involving two countries, where at least one is an EU Member State (considered to include the UK) to be reported where it meets certain criteria (referred to as the “Hallmarks”) that could indicate aggressive tax planning – these are known as a reportable CBA, or “RCBA”. The obligation to disclose such an arrangement will be on an intermediary involved in the arrangement. Although classed as intermediaries, lawyers will usually be exempt from submitting a report due to legal professional privilege.
On 8 May 2020, in response to the global pandemic, the European Commission published a proposal to delay disclosure deadlines imposed by DAC6 by three months but it should be noted that the proposal only defers the reporting deadlines, the beginning of the application of DAC 6 remains 1 July 2020. Professional advisers will need to be alert to DAC6 and clients will notice amended terms of engagement and a new focus from the outset on these new compliance obligations as penalties for non-compliance can be up to £1 million in serious cases.
An Assessment to Tax is never ‘stale’, but it might be out of date: HMRC v Tooth
This article briefly discusses the key points arising out of the decision of the UK Supreme Court in HMRC v Tooth  UKSC 17. The case considered (1) whether a discovery assessment could become “stale” and (2) the meaning of the phrase “deliberate inaccuracy”.
VATA 1994 s.47, Agency, Onward Supply Relief, & Double Taxation
On 12 July 2021, the First-tier Tribunal (Tax Chamber) (“FTT”) released its decision in Scanwell Logistics (UK) Limited v HMRC  UKFTT 261 (TC), rejecting the taxpayer’s claim for onward supply relief (“OSR”).
Whilst OSR is now limited, post-Brexit, to goods imported into Northern Ireland for onward supply to the EU, the FTT’s discussion of agency under section 47 of the Value Added Tax Act 1994 (“VATA”) is of broader interest.
The case serves as a reminder of the significant financial consequences that can result from errors in tax planning, as Scanwell was ultimately held liable for £5.7 million in unpaid import VAT despite the fact that the imported goods almost immediately left the UK (which, if properly planned, could have meant Scanwell was relieved from liability to import VAT).
Draft Finance Bill 2022—tax avoidance measures
Helen McGhee, senior associate at Joseph Hage Aaronson LLP, considers the draft Finance Bill 2022 clauses published on 20 July 2021 in relation to tax avoidance and recent updates to the tax avoidance regime.
Getting Closer: A Global Minimum Tax on Corporations
On 1 July 2021, US Treasury Secretary Janet Yellen announced that countries representing over 90% of global GDP had agreed to a global minimum tax on corporations (“GMCT”). The GMCT seeks to put a floor on tax competition on corporate income through the introduction of a minimum corporate tax of at least 15%. Whilst certain elements give rise to positive expectations, some caveats should be noted. Much will depend on (1) the outcome of future political negotiations and (2) the detail of the drafting at international and national levels.
The DBKAG & K (CJEU) decision: an opportunity for investment funds?
On 17 June 2021, the European Court decided the joint cases K (C-58/20) and DBKAG (C-59/20) regarding whether the supply of certain services constituted the “management of special investment funds”, benefiting from the VAT exemption enshrined in Article 135(1)(g) of Council Directive 2006/112/EC.