HMRC website<\/a> together with wider commentary. Many of the hallmarks are subject to a \u201cmain benefit test\u201d. This test is designed to ensure that the reporting applies to structures whose purpose is to achieve a tax advantage. I understand that there is concern that several commercial and common transactions may still be reportable if they are not implemented to achieve a UK tax advantage.<\/p>\nHMRC have offered an exemption from reporting for certain transfer pricing structures withing groups in the SME sector. This is due to certain exemptions from transfer pricing for SMEs. It is one of the few exemptions given from DAC6.<\/p>\n
Examples of hallmarks are cross-border payments between associated enterprises with a tax deduction in one country and without tax in the recipient country, circular transactions with little commerciality, and intermediaries being entitled to a fee linked to tax savings.<\/p>\n
A report requires specified information about the transaction, its hallmarks and details of users. HMRC will then issue an arrangement reference number to the person who makes the report and that person must pass the number to certain users. The reporting will be online through a portal which, at this time, is still under construction.<\/p>\n
Penalties<\/h2>\n
There are fixed penalties for failure to comply with the regulations and daily penalties for continued failings. The tax tribunal has the power to increase penalties considerably, up to \u00a31m. Penalties can be levied on a variety of parties.<\/p>\n
In conclusion<\/h2>\n
There are new reporting obligations for advisers and others for certain cross-border arrangements with considerable penalties for those who do not do not adhere to the rules. All advisers should be aware of their obligations as they may have to consider reporting on structures they are assisting with. This may be the case even if the professional is not central to the project.<\/p>\n","protected":false},"excerpt":{"rendered":"
As we are reaching the end of calendar year many international groups are turning their thoughts to possible reporting obligations under EU Directive 2018\/822\/EU, more commonly known as DAC6. Although DAC6 is an EU direction it remains relevant in the UK, despite the UK\u2019s departure from the EU. The UK has had the DOTAS (Disclosure[…] <\/p>\n
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