On 20 December 2019, Belgium has implemented in its main tax code (article 326/1 - 326/10 CIR 92) the EU Directive 2018/822 dated 25 May 2018 requiring tax payers and intermediaries to provide tax authorities with information they have on certain cross-border tax arrangements (e.g. product or transaction) involving parties in different countries that could possibly be used to avoid taxation.
Under DAC6 (so called as it is the 6th version of the EU Directive on Administrative Cooperation) tax payers and intermediaries (e.g. tax advisors, accountants, law firms, banks) are obliged to identify and report certain cross-border arrangements to local tax authorities within 30 days after the arrangement is implemented.
This legislation became applicable on July 1st but due to the COV19 pandemic, the deadline to meet the reporting obligation for the tax arrangements that were implemented during the period 25/06/2018 - 30/06/2020 has been set on 28 February 2021. For all the other reportable tax arrangements, the period of 30 days for reporting starts on 1 January 2021.
DAC6 has defined several characteristics (hallmarks) that could indicate a potential risk of aggressive tax avoidance. If a cross-border arrangement has one or more of these hallmarks, it has to be reported.
The reporting system works as follows : in most cases the tax payer and/or the primary intermediary (usually his/her tax advisor) reports the cross-border arrangement to the local tax authorities. Once reported, the primary intermediary (or its customer) must share the unique ID-reference number of the report with the other intermediaries involved. The ID-reference number is issued by the tax authorities as evidence that reporting has taken place. This evidence relieves other intermediaries of their reporting obligation. For instance, if a law firm or a bank receives an ID-reference number, it will not report the arrangement. However, if no other intermediary reports the arrangement, then they are legally obliged to do so. In other words, if an intermediary does not receive an ID-reference number, it is obliged to report the arrangement, even if it has already been reported.
Recently, the Belgian tax authorities have published an interpretative guidance that clarifies a number of questions that practioners had on the implementation of the new requirements, for instance about how to interpret hallmarks. Said guidance document can be found here (in French).