Cyprus provides DAC6 penalty relief
The Cyprus Tax Department has said that there will be no imposition of administrative fines for overdue submission of DAC6 information that will be submitted until the June 30, 2021.
The extension applies in the following cases:
The OECD/G20 Inclusive Framework on BEPS has approved the process for the BEPS Action 5 peer review of the transparency framework for the years 2021 to 2025.
The framework includes enhanced Terms of Reference for assessing the implementation of the minimum standard and a streamlined Methodology, adopting a risk-based approach towards the peer reviews.
The new process builds on the first phase of peer reviews covering the years 2017 to 2020, with the most recent statistics gathered from the 124 peer reviewed jurisdictions showing that so far 36 000 exchanges on more than 20 000 tax rulings have taken place. With the renewed peer review process now being agreed, the 2021 review in relation to the year 2020 is underway, with results expected later this year.
Croatia, Malaysia ratifies BEPS MLI
On February 18, 2021, Croatia and Malaysia deposited their instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
For Croatia and Malaysia, the MLI will enter into force on June 1, 2021.
With 95 jurisdictions currently covered by the MLI, the ratifications today by Croatia and Malaysia now bring to 63 the number of jurisdictions which have ratified, accepted or approved it. The MLI became effective on January 1, 2021, for approximately 650 treaties concluded among the 63 jurisdictions, with an additional 1,200 treaties to become effectively modified once the MLI will have been ratified by all Signatories.
Ukraine, UAE sign tax treaty protocol
On February 16, 2021, the Ukrainian government announced that it has signed a protocol to amend the country's tax treaty with the UAE.
The protocol increases the withholding tax rate on interest payments from 3% to 5%; and imposes a 5% withholding tax on royalty payments.
The protocol will enter into force after it is ratified by both countries.
On February 18, 2021, the OECD Forum on Tax Administration released a new handbook for the International Compliance Assurance Programme (ICAP), which for the first time is being run as a full program open to all FTA member tax administrations.
The handbook builds on feedback from tax administrations and MNE groups, including those with direct experience from the two pilots. Additional information on ICAP, including more frequently asked questions and a list of participating tax administrations, will be made available on the dedicated ICAP webpage during March 2021.
The Forum on Tax Administration is a global forum on tax administration for Commissioners. It has 53 members, including all G20 and OECD member countries as well as a number of advanced and emerging non-OECD economies.
On February 5, 2021, Irish Revenue published an eBrief No. 020/2021 on corporate residence.
Section 23A of the Taxes Consolidation Act, 1997 sets out rules for determining company residence in the State. Section 23A was amended by Finance Act, 2014, but the application of the amended section 23A was subject to a transition period for companies incorporated before January 1, 2015.
According to the eBrief, the transition period ceased on December 31, 2020, and the Tax and Duty Manual Part 02-02-03 has been updated to reflect this.
See eBrief No. 020/2021
Hungary publishes DAC6 guidance
On January 28, 2020, Hungary’s Finance Ministry published key DAC6 guidance.
The guidance includes details on who should provide the reporting information, and how and in what manner the information must be provided to the tax authority. The guidance also clarifies the meaning of concepts such as an arrangement and a cross-border arrangement and provides interpretation of the different applicable hallmarks.
Information is also provided on penalties that may apply in cases of non-compliance.
Cyprus extends DAC6 deadlines
On February 3, 2021, the Cypriot tax authority announced an extension of DAC6 deadlines.
The deadline for the submission of DAC6 information is extended until 31 March 2021, in the following cases:
The tax authority said that the DAC6 Directive is expected to be incorporated into the Cypriot legislation this month.
Ireland updates DAC6 guidance
On January 27, 2021, Irish Revenue published e-Brief No. 014/21, on EU Mandatory Disclosure of Reportable Cross-Border Arrangements (DAC6).
Tax and Duty Manual Part 33-03-33 has been updated to set out filing instructions where certain specified information in a disclosure is subject to Legal Professional Privilege (LPP).
In such cases, a Form DAC6 (LPP) should be filed using MyEnquiries, setting out the identity of the relevant taxpayer and other intermediaries involved in the reportable cross-border arrangement.
See e-Brief No. 014/21