IEIM621120 - Exclusions

On 28 March 2023 this legislation was repealed and replaced by the Mandatory Disclosure Rules legislation. Please refer to the guidance at IEIM700000 – Mandatory Disclosure Rules Legislation. The disclosable arrangements legislation (DAC6) will be withdrawn on 31 March 2024.

An intermediary who would otherwise have a reporting obligation under regulation 3(1) will be exempt from reporting if either of the conditions in regulation 3(2) is met. The conditions are that either:

  • The intermediary has a reporting obligation in an EU member State in respect of the same reportable cross-border arrangement, and that member State features before, or in the same paragraph, as the UK when applying the list in article 8ab(3) of the DAC, or
  • Another intermediary involved in the arrangement has reported the same information in relation to that arrangement.

The amending regulations in SI 2020/1649 continue to permit an exemption from reporting in the UK where a report has been made in another implementing jurisdiction.

The exclusion only applies where the intermediary has evidence that the information they hold has been reported in the EU member State, or has been reported by the other intermediary.

Where an intermediary has reporting obligations in multiple member States, the DAC provides at Article 8ab(3) that the intermediary should report in the member State in which it is tax resident. However, if the intermediary is not resident for tax purposes in any member State, it should report in the member State in which it has a permanent establishment (PE) through which the activities were provided in relation to the reportable arrangement. If the intermediary does not have such a PE, it should report in the member State in which it is incorporated or by the laws of which it is governed. Finally, if there is no member State in which it meets those conditions, it should report in the member State in which it is registered with a relevant professional association.

If the UK features at the same level as an EU member State in applying the hierarchy above, there is no reporting obligation in the UK where the intermediary reports in the EU member State. For example, if a US company has PEs in both France and the UK, and both PEs provide assistance in respect of the same reportable cross-border arrangement, the intermediary will not be obliged to report in the UK provided that it reports the same information under the equivalent French legislation and has evidence that it has done so.

There may be practical difficulties for intermediaries in obtaining evidence that reports made by other intermediaries involved in the arrangement are sufficient in order for the exemption to apply. IEIM659000 provides guidance on how an intermediary might obtain evidence that another intermediary has reported sufficient information.

An intermediary will not have to report information that is covered by legal professional privilege. For more information on this see IEIM621110.