Concept
DAC6 is a mandatory disclosure regime for cross-border tax arrangements in the European Union. Formally, it is the sixth amendment to the Directive on Administrative Cooperation—Council Directive (EU) 2018/822 of 25 May 2018. The idea is simple: certain cross-border structures must be disclosed in advance to tax authorities, which then automatically exchange this information within the EU. The goal is to give states early warning of potentially aggressive planning.
What is subject to disclosure: hallmarks
Not every cross-border transaction is subject to disclosure, only those that carry at least one of the marker features—hallmarks. Annex IV to the directive divides them into five categories.
- Category A—general hallmarks: confidentiality condition of the arrangement, remuneration linked to tax savings, standardized "off-the-shelf" documentation.
- Category B—specific hallmarks: acquisition of a loss-making company, conversion of income into capital, artificial circular transactions.
- Category C—cross-border payments between related parties, for example to a jurisdiction with a zero rate or without corporate tax.
- Category D—structures circumventing CRS and arrangements concealing beneficial ownership.
- Category E—transfer pricing: unilateral safe harbours and transfer of hard-to-value intangibles.
Main benefit test
For categories A, B and part of C, the hallmark alone does not trigger the disclosure obligation—the main benefit test must be met. The test is considered met if obtaining a tax advantage is the main benefit or one of the main benefits that can reasonably be expected from the arrangement taking into account all circumstances. Categories D and E operate without this test: disclosure is triggered by the mere presence of the hallmark, regardless of motive.
⚙️ The logic of the division is as follows: soft hallmarks (A, B and part of C) are filtered through motive using the main benefit test, while hard hallmarks (CRS circumvention, opacity of beneficiaries, transfer pricing) are always disclosed.
Who discloses and when
The primary obligation lies with intermediaries—consultants, lawyers, banks and tax advisers who design, market or assist with the arrangement. The deadline is strict: 30 days from the moment the arrangement is made available for implementation, ready for implementation, or the first step of its implementation has been taken. If the intermediary is exempt from disclosure by legal professional privilege or simply does not exist, the obligation passes to the taxpayer.
Why private clients need to know this
đź”— Related topics
CRS: overview · Economic substance · UBO registers · Holding structures · Exit taxes: overview · Crypto for private wealth
DAC6 is embedded in the general transparency trend alongside CRS, beneficial ownership registers and Pillar Two. For a family with assets in multiple jurisdictions, this means that cross-border restructurings, holding chains and asset transfers increasingly leave a paper trail with tax authorities even before they produce an effect. Planning does not become illegal as a result, but it requires understanding in advance which steps will be disclosed and by whom.
🍓 DAC6 requires disclosure of cross-border arrangements with hallmark features within 30 days, and for some hallmarks—only if tax benefit was one of the main objectives. This is an early transparency mechanism that should reasonably be built into planning from the outset.
This material is of an expert-analytical nature and does not constitute individual legal or tax advice.
Key factual claims
- DAC6 is a mandatory disclosure regime for cross-border tax arrangements in the European Union.
- DAC6 is embedded in the general transparency trend alongside CRS, beneficial ownership registers and Pillar Two.
- Related links: CRS: overview · Economic substance · UBO registers · Holding structures · Exit taxes: overview · Crypto for private wealth · EC — Council Directive 2018/822 (DAC6) ↗