The Council Directive (EU) 2018/822 of 25 May 2018, DAC 6 below, is an EU directive that obliges advisers to provide information to the relevant tax authority on their clients’ cross-border arrangements. The purpose of this information obligation is to combat tax evasion, tax evasion and tax avoidance.
This regulation entered into force on 1 July 2020. Please see the law in full here.
An arrangement shall be reported if it is cross-border between two or more countries and demonstrates at least one so-called characteristic. The characteristics aim to indicate risks of tax evasion and in several cases also require that a tax advantage is a main advantage. The reporting obligation also applies to advisors involved in the arrangement even though they do not provide tax related advisory.
According to national legislation, Swedish lawyers have a duty of confidentiality. For this reason, lawyers are considered to be prevented from reporting cross-border arrangements under DAC 6 to the relevant tax authority. Firstly, other advisors must report this to the relevant authorities and secondly, it is up to the client itself to comply with the reporting obligation. However, a client can always provide us at Wesslau Söderqvist Advokatbyrå a specific instruction to report the arrangement to the relevant authority if the client so wishes.
According to this regulation, we must inform other advisors that we are prevented from reporting arrangements to the relevant authority. According to the Swedish Bar Association, we cannot inform other advisors without breaching our statutory duty of confidentiality. This means that we will not inform other advisors specifically of their duty to report arrangements to the relevant authority under DAC 6