The directive, known as DAC6, will require taxpayers and their advisers to provide details of cross-border arrangements to tax authorities if they have features commonly seen in schemes to avoid or evade tax. It was originally meant to enter into force on July 1 but has been pushed back until Oct. 1 due to the novel coronavirus pandemic, the European Commission said.
Under DAC6, one test for whether a tax arrangement must be disclosed depends on whether its main benefit is to gain a tax advantage. Taxpayers and their intermediaries are also required to report transactions that bear "hallmarks" of avoidance. The announcement also pushes back the requirement to report on historical cross-border arrangements from Aug. 31 until Nov. 30.
The requirements are not being scrapped, only pushed back, the commission said.
"While the current crisis calls for adjusting the calendar for filing and transmitting some tax data, it should not lead to relinquishing the efforts of national administrations for ensuring fair taxation," the commission said.
The announcement comes after a consortium of 10 lobbying groups wrote to the commission in late April to request an extension to the anti-tax avoidance measures.
The lobbyists said many financial institutions are operating with large numbers of staff working remotely with limited information technology support. This means it is not possible to effectively undertake the validation procedures and reviews of files originally planned to comply with the legislation, according to the lobbyists.
The DAC6 legislation already applies retroactively to June 25, 2018, so delaying the reporting date would not mean that the information was not provided, the consortium of trade groups said at the time. Rather it would free up resources within financial institutions and tax authorities to deal with the pandemic, the groups said.
The European Commission didn't immediately respond to a request for comment.
--Editing by Neil Cohen.
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