Notification of cross-border transactions


If you are planning a cross-border transaction that meets at least one of the characteristics listed in the annex of the European DAC 6, you will have to report this so-called “cross-border arrangement” to the tax administrator. And if you have already taken the first step in such a transaction after 25 June 2018, you will have to announce this by 31 August 2020 at the latest.

Some features will be tested together with the test of main benefit transaction, which is to obtain a tax advantage. An example of a transaction is an arrangement in which the participant takes steps to acquire a loss-making company, using company losses to reduce one’s own tax liability, or arrangements in which income is transferred to assets, gifts or other categories that are taxed more advantageously. Another example is arrangement of transfer pricing involving the transfer of hard-to-value intangible assets, but also arrangements of one-sided safe harbour rules.

These arrangements will be communicated by intermediaries (including tax advisors or lawyers) if they provide services related to this transaction. If prevented by a legal duty of confidentiality, the taxpayers will report the transaction.

Member States must implement DAC 6 by 31 December 2019 and apply the provisions from 1 July 2020. Let’s wait and see how it will be transposed into Czech law and whether, unlike the previous DAC 5, it will be implemented on time. Of course, we will inform you of further developments.

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