11 January 2019

EFAMA comments on DAC6 - administrative cooperation in direct taxation

EFAMA is a strong supporter of the Commission’s agenda to enhance tax transparency within the EU with the aim to tackle tax abuse and resulting distortions in the internal market. European investment funds are subject to stringent EU and local regulations covering governance, organisational and operational arrangements, investment guidelines, transparency and investor protection. 

EFAMA therefore appreciated the publication of “Council Directive (EU) 2018/822 of 25 May 2018 amending “Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements” (“DAC 6”) in the Official Journal of the European Union on 05 June 2018 and would like to make positive use of the opportunity to comment on this Directive.

In addition, EFAMA would like to set out the views of the European Investment Management industry with regards to the adoption and implementation of DAC 6 by Member States. 

EFAMA is sending this paper to the tax administrations of all 28 countries adopting the Directive in parallel; as it is consistency of national implementation that EFAMA seeks above all considerations. It sets out the views of the European investment management industry with regards to the implementation of DAC 6. EFAMA makes some general comments before explaining its industry position with respect to some of the hallmarks.

A big part of the investment fund industry is highly standardised with a large amount of routine transactions. EFAMA would therefore appreciate any further guidance that clarifies that the routine transactions in and by investment vehicles (e.g. UCITS) are not supposed to be reportable under DAC 6.  In addition, it should be clarified that tax advantages that are foreseen by the law and that are only a result of the application of tax laws should not be reportable. 

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