DAC 6 – the benefits of avoiding questionnaires

4 May, 2020

Blika

When you implement a process to identify and collect information on your arrangements and potential arrangements for review and potential filing, you face a number of challenges. One is that you may need to collect information on arrangements from different departments and from local reporters. This within a tight 30-day rolling deadline.

Many multinationals and intermediaries have come to the conclusion that it is very difficult to try to collect information from different people, which may not always have deep knowledge of DAC 6, by using a questionnaire in order to identify potential arrangements and determine if they should be filed. There are a number of reasons for this view:

  • You need to ask people to fill out the questionnaire frequently making it a heavy burden for them, especially since they may already have a big reporting burden
  • The DAC 6 legislation is complex, broad and may be open to interpretations which makes it difficult to analyse by using a questionnaire
  • Considering the 30-day rolling filing deadline a questionnaire, which may be quite extensive if it tries to catch it all, will make the process slow and risk a late filing
  • Many people will not trust a questionnaire to answer potential exceptions in all jurisdictions, but will instead ask an expert anyhow since there may be grey areas which a questionnaire cannot cover
  • A questionnaire will have decreasing value since you will build up an internal knowledge database based on your organizations specific transactions negating the need to consult a questionnaire over time
  • A questionnaire risk being very long and complex which defeats its purpose and makes the process take a long time and may result in local people asking the DAC 6 responsible people in the organization or external experts for advise in most cases anyhow

Considering the difficulties with using a questionnaire many organizations opt for a tailored reporting process. This is done by making a thorough analysis of your organization and identifying the transactions that occur regularly, i.e. your organizations typical transactions, and ask people to report these on a regular basis for review and potential filing. This will allow your organization to have a quick and easy process which identifies and collects your arrangements within the tight deadline. Such a pragmatic process will support your local people and make sure they can identify and provide all the information you need to meet the DAC 6 filing requirements. The typical transactions will be fine tuned over time and more may be added when you build up your internal knowledge database of arrangements which then will be tailored for your specific circumstances.

If you would like to know more about this approach and how our solution can help you with your DAC 6 reporting, please contact peter.ohling@blika.com

 

Read more:
Mandatory Disclosure Reporting (DAC 6) – a guide on practical challenges in your daily operations.
Mandatory Disclosure Reporting (DAC 6) – why it matters for multinationals
Intermediaries’ challenges with Mandatory Disclosure Reporting (DAC 6)
Guide: Control of arrangements subject to mandatory disclosure reporting
Why it is important to keep control of Mandatory Disclosure (DAC 6) in-house
A guide for implementing an MDR (DAC 6) solution
DAC 6 – examples concerning the transfer pricing hallmarks