DAC6 Reporting due date of 28 February 2021
Due to communication difficulties linked to the COVID-19 Pandemic, the Belgian tax administration applies an administrative tolerance for all arrangements that are due to be reported in January and February 2021, resulting in a postponement until February 28, 2021. Late submission penalties will not be applied during this period.
The reporting deferral includes ‘historical’ arrangements (implemented as from 25 June 2018) as well as new arrangements as from 1 January 2021 that have a reporting deadline this January or February 2021.
What is DAC6?
Based on the EU Directive (2018/822/EU), new mandatory disclosure rules, known as “DAC6”, were implemented in Belgian domestic tax law in December 2019. This DAC6 (Directive (EU) 2018/822) is yet another automatic exchange of information Directive, inspired by the OECD initiative around Mandatory Disclosure Rules. Under DAC6, intermediaries and relevant taxpayers may incur reporting obligations regarding certain cross-border arrangements. The mandatory reporting applies even retroactively to all cross-border arrangements implemented from 25 June 2018 until 1 July 2020.
When is an arrangement subject to reporting?
The reporting obligation primarily applies to cross-border arrangements that pertain a type of tax which is subject to the EU Directive on Administrative Cooperation (“DAC”). This includes income tax, corporate income tax, trade tax, inheritance and gift tax, while VAT and customs duties are excluded in most countries (exemptions are e.g. Poland and Portugal). Potentially affected transactions are by no means necessarily aggressive or inappropriate. Rather, they may involve ordinary financing relationships, restructuring operations like the transfer of assets out of Belgium, the use of preferential tax regimes or intra-group transactions.
In general, a reportable arrangement is any cross-border transaction which involves at least one EU Member State and meets one of the so-called “hallmarks”. While some hallmarks only lead to a reporting obligation if the main benefit of the arrangement is the creation of an advantage that would not exist without the arrangement, other hallmarks lead to a reporting obligation regardless of an expected tax advantage:
Who has an obligation to report?
The reporting obligation applies primarily to those qualifying as “intermediaries”. This can be anyone who
- Is involved in the design and/or implementation of the cross-border arrangement in an advisory capacity
- Designs or organizes the arrangement for a third party
- Makes the arrangement available for use or manages its implementation by a third party.
Important to note is that, where the intermediary is legally obliged to maintain confidentiality (and consequently has notification obligations and no direct reporting obligations), the reporting obligation may be transferred to other intermediaries, or, in the absence thereof, the relevant taxpayer of the cross-border arrangement incurs the reporting obligation.
As from when does this apply?
Initially, intermediaries and, where applicable relevant taxpayers were supposed to file the first DAC6 reports within 30 days from 1 July 2020, i.e. by 31 July 2020. Arrangements the first step of which was implemented during the so-called “retroactivity period” (between 25 June 2018 and 1 July 2020) would need to be disclosed by 31 August 2020.
Following an amendment to the Directive, most EU member states postponed the deadlines to 30 days as from 1 January 2021 as well as, for the retroactivity period, to 28 February 2021. However, some countries stuck to the initial deadlines.
Compliance and Reporting Procedure
The data reporting procedures and systems differ in each Member State. For Belgium, the Belgian tax administration made the xml-tool public available on 23 December 2020 (https://financien.belgium.be/nl/E-services/mandatory-disclosure-rules). As from 4 January 2021 it has become possible in Belgium to effectively file a DAC6 report via the MyMinfin DAC 6-portal of the Belgian Ministry of Finance.
On 28 January 2021, Belgium’s Federal Public Service Finance issued a release on the postponement of the initial deadlines for DAC6 reporting.
Administration tolerance is being granted for arrangements to be reported in January and February 2021 as long as arrangements are reported by 28 February 2021.
Lowered VAT rate for COVID-related goods and services
Temporarily reduced VAT rate of 6% for masks and hand sanitizers
The supply, intra-community acquisition and importation of mouth masks and hand sanitizers is subject to a reduced VAT rate of 6%. The reduced VAT rate is only applicable if the products have a specific Combined Nomenclature code.
The lowered VAT rate is applicable until March 31, 2021.
Temporarily reduced VAT rate of 0% for vaccines, testing kits and closely related services
As of January 1, 2021 until December 31, 2022, the supply, intra-community acquisition and importation of vaccines, medical devices necessary for the vaccination and testing kits for COVID-19 as well as provided services closely related to it, are subject to a reduced VAT rate of 0%.
Post Brexit - Belgian VAT registration for UK entities
The Belgian VAT authorities have confirmed their position concerning the trade and cooperation agreement between the UK authorities and the European Union, which includes a protocol on administrative cooperation in the field of VAT.
If the European Parliament confirms the scope of this protocol in terms of administrative cooperation (EU Parliament ratifying Agreement), British taxpayers will be in exactly the same situation as Norwegian taxpayers:
- There will no longer be a legal basis for requiring UK taxable persons to appoint a responsible representative within the meaning of Article 55(1) of the Belgian VAT Code;
- On the other hand, British taxable persons will of course still be free to opt for the fiscal representation or the direct VAT registration (on the basis of Article 55(2)(1) and (2) of the VAT Code).
UK entities will therefore continue to have both options and will no longer be required to appoint a fiscal representative for VAT purposes.
Global Mobility Services
Life after Brexit: competent social security authorities in cross-border employment
Already one year ago, on 31 January 2020, the United Kingdom left the European Union. Both parties agreed on a withdrawal agreement (WA) which entered into force on 1 February 2020. However, a transitional period ran until 31 December 2020, in which the ‘usual’ EU Regulations n° 883/2004 were still applicable.
Cross-border situations started prior to 31 December 2020
For persons whose cross-border situation started on 31 December 2020 at the latest, nothing much changes as the European social security regulation n° 883/2004 will also continue to apply after the end of the transition period (i.e. after December 31, 2020). These are the so-called ‘grandfather rights’.
It is important to note that these ‘grandfather rights’ are not applicable anymore as from the moment the cross-border situation is interrupted or changed, regardless of the duration of the interruption.
For clarification purposes, the Belgian social security authorities have already confirmed that assimilated periods (i.e. sickness, paid career break, etc.) and annual paid holidays are not seen as interruptions. Until present, it was not yet confirmed whether COVID-19 travel restrictions would be considered as an interruption of the cross-border situation.
Cross-border situations starting as from 1 January 2021
It was a long time uncertain what would happen for cross-border situations that started from 1 January2021. Either there would be a positive conflict of law, meaning that social security contributions would have to be paid in multiple countries, or a negative conflict of law, in which case the cross-border worker would not be insured at all. Each situation would have to be examined case-by-case.
Fortunately, the Belgian social security authorities recently confirmed that an agreement had been reached between the EU and the UK regarding social security in the Trade and Cooperation agreement for secondments. According to article SSC.11 of the Agreement, the habitual social security system can be applied during a cross-border secondment in which the UK is involved for maximum 24 months if the involved EU-country is listed in the Annex SSC.8 of the Agreement. Most likely, Belgium will also be included in this Annex, which is good news.
For split employment situations (the work is performed in multiple countries, the employer is based in the UK, …), nothing has been agreed upon (yet) and the applicable social security legislation will have to be analyzed case by case.
We expect that further communication from the Belgian and/or European authorities will still follow in the coming weeks, but if you would have any questions in the meantime, please do not hesitate to contact email@example.com or your usual contact person at Mazars.
Organisation of electronic and written general meetings simplified
On 24 December 2020, the Law of 20 December 2020 containing various temporary and structural provisions relating to justice in the context of the fight against the spread of the coronavirus Covid-19 entered into force. This law makes it easier to organise general meetings remotely.
The organisation of a remote general meeting
Companies with legal personality (public limited liability company, private limited company and cooperative company) and (international) non-profit associations were previously only allowed to organise a remote general meeting if their articles of association permitted this. From now on, a provision in the articles of association is no longer required.
The Law of 20 December 2020 grants the management body the power to decide on whether or not to hold an electronic general meeting. The shareholders or members may participate by means of electronic communication, the members of the bureau of the meeting, however, cannot participate electronically.
If the articles of association do not specify the procedures regarding remote participation in the general meeting, the management body shall include them in the notice convening the general meeting. If the company or the non-profit association has a website, the procedures should also be made available on it. The electronic means of communication used must enable the company or the non-profit association to verify the capacity and identity of the shareholder or the member. This is the case for meetings organised by Zoom, Teams or Skype, or similar means.
The electronic means of communication shall at least enable the participants in the general meeting to take direct, simultaneous and uninterrupted notice of the proceedings at the meeting and to exercise their right to vote on all items on which the meeting is called to decide. They must also enable them to participate in the deliberations and ask questions. The possibility to participate and ask questions can be excluded if the management body justifies in the notice of the general meeting why the company or the non-profit association does not have such an electronic means of communication at its disposal. However, this exception is limited in time until 30 June 2021.
General meeting with written decision-making
Furthermore, it is possible to organise the general meeting in writing and to take all decisions in writing by unanimous vote, except for amendments to the articles of association. This rule was adapted for companies and was newly introduced for (international) non-profit associations. It will remain in place after the COVID-19 crisis.
From now on, it can thus be decided in any company or association to organise an electronic or a written general meeting, if the conditions outlined above are met.
Global Mobility Services
Update obligation foreign employees
On January 12, 2021, an amendment to the Ministerial Decree of October 28, 2020 was published, to limit further spread of COVID-19.
Employers temporarily employing employees or self-employed persons in Belgium, who in principle reside abroad, are obliged within the framework of contact tracing to keep a register with a number of data about these employees (i.e. identification data of these employees, their place of residence during their employment in Belgium, phone number and the persons with whom the employee has worked during his employment in Belgium). The register must be kept from the beginning of the employment until the fourteenth day after the end of the employment.
In addition, these employers are also obliged to check whether the PLF (Passenger Location Form) has been completed by the foreign employee. If the form is not completed, they must ensure that this form is filled out before starting their employment in Belgium.
A new article was also introduced, which imposes a general obligation to all employees and employers present at the workplace to comply with COVID-measures/obligations imposed by the competent authorities (i.e. federal and local). This generally concerns measures with respect to mandatory quarantine for infected persons, persons returning from a high-risk area, and persons who have had a high-risk contact, and required testing.
Hence, the foreign employee must also be able to provide evidence of a negative COVID-19-test that would have been taken less than 72 hours before starting employment in Belgium. This test can be requested by an occupational (labour) physician and by the inspection services.
These obligations (i.e. keeping a register, check the PLF and the presentation of a negative COVID-19 test) have been extended to all sectors since the amendment and does not apply to employers who are considered as natural persons. Furthermore, this obligation does not include frontier workers or when there are staying less than 48 hours in Belgium.
These measurements are in principle applicable until March 1, 2021.
KEEP IN MIND THE DEADLINE !
- VAT return January 2021 : before February 20, 2021
Personal income tax return / Corporate income tax return
- Forms 325.10 & 325.20 (fiche 281.10 & 281.20) : deadline February 28, 2021
- DAC6 reporting : deadline February 28, 2021
- Request reimbursement or transfer of prepayment (personal/corporate) for income taxes