Locating DAC6 in the RegTech ecosystem

The DAC6 directive is a mandatory disclosure requirement to fight against tax arrangements and opaque structures. Financial intermediaries such as, banks, asset managers, financial and tax advisors, tax specialists and wealth managers must identify, evaluate, and report cross-border tax arrangements. We have partnered with Hansuke Consulting for their “DAC6 Academy”- 12-week online seminar series and presented you a virtual discussion on August 13, where we elaborated how to successfully manage challenges from DAC6 reporting and how to achieve tax integrity.

Webinar Summary

With rising FCA fines for non-compliance, amidst an uncertain and perpetually shifting regulatory landscape, innovation via automated solutions in the form of RegTech is becoming an increasingly popular tool for financial firms to build into their reporting methods. The webinar examined the pivotal role played by technology in the DAC6 reporting requirement, a crucial component of one of the most challenging and significant developments in cross-border tax reporting. The topics discussed include DAC6 and industrial design, multiple intermediary reporting, big data, tax transparency and data privacy, as well as important operational features. 

Given the regime’s heavy focus on compliance aspects, not just a simple tax reporting function, DAC6 solutions must be more ‘process’ than ‘data-driven’. Technological solutions therefore should focus specifically on users and processes, including features such as questionnaires and quality checks. It is also necessary to note the substantial variations in reporting requirements on a country-bycountry basis. Whilst automated solutions may appeal as more effective, latest jurisdiction-specific information must be incorporated into the operationalisation of these mechanisms. For example, the deviation in the MBT interpretations certainly requires country-specific guidance, and thus must be built into solution implementation.

One key challenge of DAC6 reporting lies with multiple intermediaries. Intermediaries, such as private banks, wealth managers, custody banks, lawyers and accountants, have different business models, needs and transaction volumes. Solutions must support users in quantification of the information and provision of automatisation with a country-specific aspect, given that many intermediaries have international operations. RegTech solutions must facilitate the establishment of communication pathways between intermediaries for easier exchange of information and proof of reporting.

Panelists: 
Fabrice Chatelain, Director, Regnology
Ali Kazimi - Managing Director, Hansuke Consulting