Following extensive lobbying by not only financial institutions and intermediaries, but also by EU governments, the EU Commission has published a proposal for an extension of the reporting deadlines in relation to both the CRS and DAC6 reporting regimes. The proposals are in the form of an amendment to the Directive on Administrative Co-operation and so will need EU Council approval. This is likely to be forthcoming notwithstanding that certain member states were asking for longer extensions.
As regards CRS, the deadline for governments to report information submitted to them by financial institutions in relation to reportable financial accounts is extended to 31 December 2020. It is to be noted that this does not impact on the reporting deadlines for the financial institutions themselves although it is possible that governments may pass their own regulations to allow for that. It is also to be noted that these extensions would in the normal course only apply as between EU countries and so the deadlines for reporting financial accounts in relation to other jurisdictions may be unaffected.
As regards DAC6, the deadlines have been extended by three months. This does not amount to a postponement of the DAC6 implementation date of 1 July 2020, but an extension of reporting deadlines. The effect of this is that, whereas previously there were essentially two reporting timelines, now there will be three:
- The deadline for the reporting of cross-border arrangements whose first step of implementation occurred between 25 June 2018 and 1 July 2020 (the so-called transition period) is extended from 31 August 2020 to 30 November 2020.
- The 30 day deadline for the reporting of cross-border arrangements whose first step of implementation occurs from 1 July 2020 onwards now distinguishes between two different situations:
- For those arrangements where under the old timelines the 30 day period would have started running between 30 June and 1 October 2020, the 30 day period starts running from 1 October 2020 (thus introducing a second transitional period); and
- For all other arrangements, the 30 day period will start running in the same way as before from 1 October 2020 onwards.
There is the possibility of a further three month extension if the EU Commission decides that it is justified by the continuation of exceptional circumstances of severe risks for public health caused by the COVID-19 pandemic and EU countries have to implement lockdown measures. Bearing in mind the de-confinement processes that have started across Europe, it would appear that it would require a reversal of those processes to bring into play the extra three months extension.
The EU Commission proposals are expected to be considered by the EU Council today. It is assumed that they will be accepted but this blog will provide updates if there are any material departures from the Commission proposals.