2024-08-01-KPMG_s_EU_Tax_Centre-Euro_Tax_Flash_from_EU_Tax_Centre_9页_665kb

CJEU Decision on DAC6 Validity and Notification Obligations

Key Summary

• The Court of Justice of the European Union (CJEU) issued a decision on July 29, 2024, in case C-623/22, addressing the validity of provisions in Directive 2018/822/EU (DAC6) for automatic exchange of reportable cross-border arrangements.
• The CJEU upheld the validity of DAC6, concluding that broad but sufficiently clear concepts in the directive do not violate EU fundamental rights or legal principles:
  • Key terms like "arrangement" are defined by ordinary usage and international standards, meeting clarity requirements.
  • The scope of reporting obligations covers taxes beyond corporate income (except VAT, customs duties, and excises), aligning with anti-tax evasion objectives.
• Notification obligations under DAC6 are restricted to lawyers and other professionals defined under Directive 98/5/EC, as determined by the CJEU's ruling in case C-694/20. Other professionals are not extended the same notification waiver.
• The decision dismisses arguments regarding privacy, equality, and proportionality, affirming that reporting constraints are balanced against public interest in combating tax evasion.

Background and Analysis

• The case arises from the validity of DAC6 implementation, including modifications to reporting rules and legal professional privilege.
• The CJEU emphasized that EU authorities have discretion in tax planning measures, provided they are not manifestly inappropriate.
• Implications include a narrow interpretation of professionals eligible for notification waivers, potentially affecting cross-jurisdictional application and harmonization.