# DAC6: Mandatory Disclosure of Cross-Border Arrangements in the EU and Hallmarks > EU Directive 2018/822 (DAC6): who discloses cross-border tax arrangements and when, five categories of hallmarks, and the role of the main benefit test. Author: Мария Плотникова — юрист, Family Office (https://wiki.private.law/authors/plotnikova) Last modified: 2026-07-21T09:26:00.000Z Canonical: https://wiki.private.law/en/dac6-hallmarks Topics: investments Jurisdictions: eu Semantic tags: tax-regime --- ## 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](https://taxation-customs.ec.europa.eu/system/files/2018-08/dac-6-council-directive-2018_en.pdf) 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. The regime's roots lie in BEPS Action 12 (Mandatory Disclosure Rules): the OECD proposed the very template of early declarations, and the EU made it mandatory for all member states and placed it alongside the anti-avoidance toolkit—[GAAR and the principal purpose test](https://wiki.private.law/en/gaar-ppt). ## Where the regime came from The emergence of DAC6 was the EU's response to a decade of fighting base erosion. Within BEPS Action 12 the OECD framed the very idea of mandatory disclosure, and Brussels built it into the Directive on Administrative Cooperation and gave it substance: a single list of hallmarks, strict deadlines and automatic exchange between countries. Formally the directive has applied since 2018, but because of the pandemic the first reports slipped to January 2021—at which point structures put in place from 25 June 2018 onwards had to be disclosed retroactively. Since then, cross-border arrangements within the EU have lived under a regime of early visibility to tax authorities. ## 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 becomes available for implementation, is ready to go, or its first step has been taken. If the intermediary is protected by legal professional privilege, or simply does not exist—for example, where the structure was assembled by a consultant outside the EU—the obligation passes to the taxpayer. A court amendment matters here: in Case C-694/20 (8 December 2022) the Court of Justice relieved a lawyer bound by professional secrecy of the duty to notify other intermediaries about disclosure, since such notification would breach legal professional privilege. ## How it looks in practice The easiest way to get a feel for DAC6 is through concrete structures. A [holding chain](https://wiki.private.law/en/holding-structures) that runs dividends through a zero-rate jurisdiction touches category C. A structure that helps circumvent the [CRS](https://wiki.private.law/en/crs-overview) perimeter or conceals the [real beneficiary](https://wiki.private.law/en/beneficial-ownership-nominee) falls under category D—and here the main benefit test is not needed, disclosure is triggered automatically. An intra-group transfer of hard-to-value intangibles or a unilateral safe harbour falls into category E. In every case, disclosure merely makes the step visible to the tax authority before it produces an effect. > 💡 Disclosure merely informs the tax authority: it does not determine the legality of the structure itself. But missing a disclosure carries penalties, and each EU country sets their size itself—from a few thousand euros to sanctions tied to the scale of the transaction. ## Evolution: DAC7, DAC8 and the position of the courts DAC6 is only one link in an expanding chain of directives. DAC7 (Council Directive (EU) 2021/514) required digital platforms to report their sellers' income from 2023. [DAC8](https://taxation-customs.ec.europa.eu/taxation/tax-transparency-cooperation/administrative-co-operation-and-mutual-assistance/directive-administrative-cooperation-dac/dac8_en) (Council Directive (EU) 2023/2226) took the same logic to crypto-assets: from 1 January 2026 Crypto-Asset Service Providers collect and transmit data on clients and transactions, aligned with the OECD CARF. Transparency thus steadily covers new asset classes—from bank accounts to platforms and [digital assets](https://wiki.private.law/en/crypto-private-wealth). In parallel, the regime was tested for strength in the courts. In Case C-694/20 (8 December 2022) the Court of Justice protected legal professional privilege and relieved lawyers of the duty to notify other intermediaries. And in Case C-623/22 (29 July 2024) it considered a broader attack on DAC6—on equality, legal certainty and privacy—and held the directive valid. The upshot: the DAC6 framework held, with the carve-out on legal professional privilege for lawyers. ### After Brexit: UK MDR After leaving the EU, the United Kingdom first narrowed DAC6 to the single category D, and from 28 March 2023 replaced it with its own regime—the Mandatory Disclosure Rules based on the OECD model rules. The UK MDR requires disclosure of only two hallmarks: arrangements circumventing CRS (D1) and structures concealing beneficial ownership (D2). With assets on both sides of the Channel, this means the EU and the UK apply different, though related, sets of hallmarks. > 🧭 The practical takeaway with cross-border assets: before launching a restructuring, it is worth finding out in advance which hallmarks it touches, who must disclose it and within what deadline, and whether the disclosure perimeter coincides across jurisdictions. At the planning stage this is cheaper than explaining after the fact. ## Why private clients need to know this > 🔗 **Related** > [CRS: overview](https://wiki.private.law/en/crs-overview) · [Economic substance](https://wiki.private.law/en/economic-substance) · [UBO registers](https://wiki.private.law/en/ubo-registers) · [Holding structures](https://wiki.private.law/en/holding-structures) · [Exit taxes: overview](https://wiki.private.law/en/exit-taxes-overview) · [Crypto for private wealth](https://wiki.private.law/en/crypto-private-wealth) · [GAAR and the principal purpose test](https://wiki.private.law/en/gaar-ppt) · [EU ATAD & CFC](https://wiki.private.law/en/eu-atad-cfc) · [Beneficial ownership and nominees](https://wiki.private.law/en/beneficial-ownership-nominee) DAC6 is built into the broader transparency trend—alongside CRS, beneficial-ownership registers, [ATAD](https://wiki.private.law/en/eu-atad-cfc) and Pillar Two. With assets in several jurisdictions, this means that cross-border restructurings, holding chains and asset transfers increasingly leave a paper trail with tax authorities before they produce an effect. The planning itself remains legal; what changes is only that the key steps become visible in advance, and it is sensible to build this into strategy from the very start. > 🍓 DAC6 requires cross-border arrangements with hallmark features to be disclosed within 30 days, and for some hallmarks—only if the tax benefit was one of the main objectives. This is an early-transparency mechanism that it is reasonable to build into planning from the very start. *This material is of an expert-analytical nature and does not constitute individual legal or tax advice.* --- ## Sources - [Council Directive (EU) 2018/822](https://taxation-customs.ec.europa.eu/system/files/2018-08/dac-6-council-directive-2018_en.pdf) - [DAC8](https://taxation-customs.ec.europa.eu/taxation/tax-transparency-cooperation/administrative-co-operation-and-mutual-assistance/directive-administrative-cooperation-dac/dac8_en) --- ## Factual claims - DAC6 is a mandatory disclosure regime for cross-border tax arrangements in the European Union. - The emergence of DAC6 was the EU's response to a decade of fighting base erosion. - The primary obligation lies with intermediaries—consultants, lawyers, banks and tax advisers who design, market or assist with the arrangement. - The easiest way to get a feel for DAC6 is through concrete structures. - DAC6 is only one link in an expanding chain of directives. - After leaving the EU, the United Kingdom first narrowed DAC6 to the single category D, and from 28 March 2023 replaced it with its own regime—the Mandatory Disclosure Rules based on the OECD model rules. - DAC6 is built into the broader transparency trend—alongside CRS, beneficial-ownership registers, ATAD and Pillar Two.