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In brief

On 28 April 2023, the Dutch state secretary of finance published an updated version of the Dutch guidance on the mandatory disclosure regime on cross-border transactions, generally known as DAC 6. The slight amendments to the previous guidance are due to signals from the public and are intended to help tax practitioners and other intermediaries determine what transactions must be reported. In our view, the changes also intend to reduce the number of reported transactions that are clearly outside the scope of DAC 6. Furthermore, the updated version clarifies the Dutch government’s position on legal privilege in light of the 8 December 2022 judgment from the Court of the Justice of the EU (CJEU)

In depth

While the new guidance is largely the same as the original of 24 June 2020 (see our previous client alert), the most substantive changes are summarised below:

1. Concept of “arrangement”

Section 2 of the new guidance clarifies that an adjustment to an existing arrangement can also lead to a new reportable cross-border arrangement (RCBA). According to the new guidance, this could be the case if there is a change to one of the following: 

  1. One or more of the participants to the arrangement
  2. A participant’s legal form
  3. A participant’s fiscal residence
  4. The method of financing (in case it has consequences for its tax qualification)

If another Hallmark becomes applicable to the arrangement as a result of such a change, this should — according to the revised guidance — in any event result in a new RCBA.

In addition, the term “participant” is discussed in more detail.

While the term is left undefined, the updated guidance affirms that to be qualified as a participant, a person must have a certain degree of involvement in an arrangement. According to the new guidance, such involvement can stem from – among other things – the adoption of a board resolution or “becoming subjected to accounting or tax adjustments”. A tax consequence could be the processing of a corresponding adjustment due to an amendment in the tax qualification of a transaction, e.g., a transaction that turns out to be non-arm’s length (“onzakelijke transactie”).

Additionally, the new guidance states that an arrangement can have only one participant, e.g., when a transfer occurs between a company’s head office and its foreign permanent establishment. This is line with Dutch parliamentary history with respect to the implementation of DAC 6, which includes some examples describing the possible application of Hallmarks to the profit allocation between head office and its permanent establishment. However, there are good arguments for defending that a branch is not a participant.

2. The intermediary’s or taxpayer’s reporting obligation

Several changes are meant to clarify situations where an intermediary is involved in an RCBA. The new guidance clarifies that mere compliance activities cannot result in an RCBA. Compliance activities would include services such as “bookkeeping, preparing tax returns, TP documentation, due diligence reports, providing assistance in connection with a mutual agreement procedure or a tax audit or litigation”. Obviously, this non-exhaustive list of (compliance) activities is meant to reduce the number of transactions that are currently being reported in the Netherlands, which is known to receive a significantly larger amount of DAC 6 reports than its EU peers.

Secondly, attention is paid to lawyer intermediaries’ legal professional privilege (LPP), in light of the CJEU’s recent judgment. The new guidance clarifies that a lawyer intermediary who is subject to LPP must only notify their client that the latter is obliged to report under DAC 6. This change in the guidance — only for lawyer intermediaries — has retroactive effect to the date the DAC 6 Directive was implemented into Dutch law. The CJEU’s judgment does not affect any of the other DAC 6 obligations.

Thirdly, the (very limited) time frame within which an RCBA must be reported is clarified. According to the DAC 6 rules, an RCBA must be reported within 30 calendar days from one of the following — whichever comes first:

  1. The day after the RCBA is made available for implementation
  2. The day after the RCBA is ready for implementation
  3. When the first step in the implementation of the RCBA has been made.

In practice, these rules have resulted in much discussion and uncertainty.

According to the new guidance, an RCBA is “made available for implementation” if the intermediary has completed the intermediary activities for the arrangement and delivered the results to the relevant taxpayer. This would be the case if the intermediary provides the final version of the advice to the relevant taxpayer, but also if a provisional (draft) version is provided in respect of which it can be reasonably assumed that it can be implemented immediately without any substantial changes required. This also applies if it is ultimately decided not to implement an RCBA, whether it proves impossible to implement or whether the implementation is cancelled for another reason.

It seems to us that the Dutch tax authorities want to avoid “over-reporting” and provide intermediaries and taxpayers slightly more room (i.e., time) to report those arrangements that reached a certain level of maturity and likelihood of implementation. Nevertheless, lacking any guidance from the tax courts, intermediaries may still elect to report at the earliest possible stage to reduce the risk of penalties.

According to the guidance, the first step of implementing an arrangement is to perform an action (“handeling”). Performing an action can, for example, include concluding a (loan) agreement, taking a board decision or making a payment.

The reporting deadlines continue to apply if the reporting obligation does not remain with an intermediary, but with the relevant taxpayer.

Finally, attention is paid to potential penalties for noncompliance. Penalties are only imposed in the case of wilful noncompliance or gross negligence, and the maximum administrative fine can be as high as EUR 900,000. Noncompliance would also include an intermediary who invokes LPP but does not immediately notify the relevant taxpayer/client of their reporting obligation. While there is no prescribed form (“vormvrij”) for the notification, the intermediary must keep a record of the notification as evidence.

The new guidance now refers to the Decree for Administrative Penalties (“Besluit Bestuurlijke Boeten”) for establishing the fine and applying mitigating and aggravating circumstances.

3. The Main Benefit Test

Some changes have been made to the paragraph clarifying the main benefit test (MBT). A few examples of what can be considered a tax benefit are given, and the application of the two relevant tests for the MBT has been clarified. The additional text is copied from Dutch parliamentary history and does not contain new insights.

The updated version also clarifies that if a tax benefit is in accordance with tax legislation and aligns with the legislator’s policy intent, this aspect can be considered for the MBT. However, it is not a decisive factor as to whether the test has been passed. The two prescribed tests for the MBT (i.e., whether there is a tax benefit and whether this is the main benefit or one of the main benefits) remain decisive for the question of whether the MBT has been met.

4. Comments with respect to the Hallmarks

Additionally, several examples have been clarified.

For example, it is clarified that when a Dutch company incorporates a foreign subsidiary to engage in activities in the (near) future, such incorporation does not qualify as a standardised structure within the scope of Hallmark A3 (this is probably included again to avoid over-reporting) (example 4). Hallmark B2 concerns the conversion of income to reduce the tax burden. The new guidance clarifies that this Hallmark does not apply to “starting positions” (i.e., situations where there are no existing flows of income that are converted) and that there must be a conversion to income that is subject to a lower tax rate (again, over-reporting seems the main reason for this clarification).

Most new examples relate to Hallmark E3 in relation to intragroup cross-border restructurings (i.e., transfer of functions, assets and/or risks), which is one of the most reported Hallmarks in the Netherlands. The new guidance also elaborates on the so-called “EBIT test” and explains that — according to the Dutch tax authorities — this test can also be met if a negative EBIT becomes more negative.

5. Reporting portal

In the new Section 8, the reporting portal is discussed in more detail. An RCBA can only be reported electronically via the reporting portal. In addition, an RCBA that has already been the subject of (international) consultation with tax authorities must be reported through the reporting portal, whether the consultation resulted in a determination agreement (“ruling”) or not.

Next steps

If you have any queries on any of your cross-border transactions in light of this recent amendment, or in light of the 8 December 2022 CJEU judgment, please reach out to your local Baker McKenzie contact or one of the authors of this alert. 


Megan is a Dutch lawyer with more than seven years experience with tax dispute resolution, procedural tax law, international tax law, DAC6 (Mandatory Disclosure) and transactional work. She represents clients during all stages of tax disputes, including (cross-border) audits, administrative appeals and litigation and she assists clients with tracking global tax controversies, MAP procedures and legal opinions. Her experience encompasses a broad range of issues, including disputes on: transfer pricing, business restructurings, corporate income tax, information obligations, exchange of information, effective place of management and tax residency/permanent establishments. Megan represents clients from a wide variety of industry sectors before the tax courts in the Netherlands and advises clients in a wide variety of industry sectors on tax matters. Megan spent a year on secondment in our Chicago office with the US Tax Controversy team and has experience with US and international tax controversies. She also advises clients in a wide variety of industry sectors on tax matters and mergers and acquisitions, including but not limited to due diligence, SPA negotiations, W&I policy negotiations and specific Tax Insurance policy negotiations.


Jan-Willem A.M. Gerritsen started with Baker McKenzie Amsterdam in the International Tax Group in 1990, and has been a partner since 1998. He is affiliated with the Dutch Bar Association, the Dutch Organization of Tax Practitioners (NOB) and the IFA.

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