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Clifford Chance

Clifford Chance

Briefings

Court of Justice of the European Union rules that lawyers do not have to notify any longer other intermediaries of their DAC6 reporting obligations due to legal professional privilege

December 9, 2022

On 8 December 2022, the Court of Justice of the European Union took an important decision in the recognition of legal professional privilege of the lawyer with respect to the mandatory automatic exchange of information in relation to reportable cross-border arrangements ("DAC6") as it results from the Council Directive (EU) 2018/822 of 25 May 2018 amending Council Directive 2011/16/EU of 15 February 2011.

According to DAC6, intermediaries (or taxpayers if there are no intermediaries or if intermediaries are subject to professional secrecy) must in principle report certain cross-border transactions and arrangements to the national tax authorities. However, DAC6 allows EU Member States to waive, and thus exempt, EU intermediaries from their reporting obligations where such an obligation would breach the rules of legal professional privilege that apply under national law of that Member State. As a consequence, lawyers benefit from a waiver of their reporting obligations under DAC6. However, intermediaries (including thus lawyers) benefiting from a waiver of their reporting obligations still have an obligation to notify all other intermediaries (not exempt from reporting obligations) or the taxpayer directly (if there are no other non-exempt intermediaries) that the reporting obligation is shifted to them.

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