What is DAC6?
EU Directive 2018/822 — commonly known as DAC6 — is the sixth amendment to the EU Directive on Administrative Cooperation in Taxation (DAC). It requires the mandatory disclosure of certain cross-border tax arrangements to national tax authorities, which then automatically exchange information with other EU member states' tax administrations. The stated purpose of DAC6 is to give tax authorities early warning of potentially aggressive cross-border tax arrangements, enabling them to assess and respond to tax risks before significant revenue has been lost.
Spain implemented DAC6 through amendments to Real Decreto 1070/2017 and the accompanying ministerial regulations. The Spanish implementing legislation came fully into effect in January 2021, with retroactive reporting for arrangements made between 25 June 2018 and 30 June 2020.
The Five Categories of Hallmarks
DAC6 applies to cross-border arrangements that exhibit one or more "hallmarks" — defined characteristics that indicate potential aggressiveness. The hallmarks are divided into five categories (A–E), some of which require the arrangement to pass a "main benefit test" (i.e., the main benefit of the arrangement must be a tax advantage) and some of which apply regardless of any tax benefit test.
Category A: Generic Hallmarks Subject to the Main Benefit Test
Category A hallmarks require reporting where one of the main benefits of the arrangement is a tax advantage, and the arrangement includes one of the following characteristics:
- A.1 Confidentiality clauses: The arrangement requires the taxpayer to keep it confidential from other tax authorities
- A.2 Success fees: The intermediary's fee is contingent on the tax advantage actually being achieved
- A.3 Standardised arrangements: The arrangement uses substantially standardised documentation and is designed for mass marketing
Category B: Specific Hallmarks Subject to the Main Benefit Test
Category B hallmarks focus on: arrangements involving a loss-making company (acquired for its tax losses); converting income into capital or gifts; circular transactions with no commercial substance.
Category C: Specific Hallmarks Related to Cross-Border Transactions
Category C hallmarks — some of which require the main benefit test, some of which do not — cover:
- C.1: Deductible cross-border payments to recipients in jurisdictions with zero/near-zero corporate tax, or where the payment is not taxed in the recipient's hands (hybrid mismatches)
- C.2: Deductions for the same depreciation in more than one jurisdiction
- C.3: Double relief from double taxation for the same item of income in more than one jurisdiction
- C.4: Transfer of assets where the arm's-length price differs materially in two different jurisdictions
Category D: Hallmarks Relating to Automatic Exchange of Information
Category D hallmarks — which do not require a main benefit test — cover arrangements designed to circumvent CRS/FATCA reporting obligations, or arrangements that obscure the beneficial ownership chain, preventing effective automatic exchange of information.
Category E: Transfer Pricing Hallmarks
Category E hallmarks cover specific transfer pricing risks: the use of unilateral safe harbours, the transfer of hard-to-value intangibles, and intra-group cross-border transfers of functions, risks, or assets where the impact on profits in one jurisdiction exceeds 50% over three years.
Who Must Report in Spain
Intermediaries (Primary Obligation)
The primary reporting obligation falls on intermediaries — any person who designs, markets, organises, makes available, or manages the implementation of a reportable cross-border arrangement. In Spain, this includes:
- Tax advisers (asesores fiscales) and tax lawyers
- Accountants and auditors
- Banks, financial institutions, and investment advisers who design or structure arrangements
- Management consultants who advise on cross-border tax arrangements
- Notaries and civil law notaries involved in arrangements with tax implications
An intermediary has a Spanish DAC6 obligation if they are: (i) resident in Spain, (ii) have a PE in Spain through which services are provided, (iii) incorporated in Spain, or (iv) registered in Spain as a professional under Spanish law.
Taxpayers (Secondary Obligation)
Where there is no EU-based intermediary — for example, where all intermediaries are based outside the EU or where an intermediary invokes professional secrecy and notifies the taxpayer — the reporting obligation falls to the taxpayer themselves. Spanish tax residents who implement reportable cross-border arrangements without an EU intermediary must self-report.
The Cross-Border Element
DAC6 applies only to cross-border arrangements — those involving more than one EU member state, or involving at least one EU member state and a third country. Purely domestic Spanish arrangements (even aggressive ones) are outside the scope of DAC6. However, Spain's domestic equivalent reporting rules (under the Ley de Medidas de Prevención del Fraude Fiscal) may capture some domestic arrangements separately.
Reporting Deadlines and Spanish Modelos
Spain uses three separate forms for DAC6 reporting:
| Modelo | Purpose | Who Files | Deadline |
|---|---|---|---|
| Modelo 234 | Initial disclosure of new reportable arrangement | Intermediary (or taxpayer if no EU intermediary) | 30 days from the date the arrangement is made available / implemented |
| Modelo 235 | Quarterly update for marketable arrangements | Intermediary (for standardised/mass-market arrangements) | 30 days after end of each calendar quarter in which the arrangement was used |
| Modelo 236 | Annual declaration of Spanish users of arrangements reported by an intermediary in another EU state | Intermediary or taxpayer | 30 days after end of calendar year |
What Triggers a DAC6 Report for a Typical HNW Client
In practice, the arrangements most likely to trigger DAC6 reporting for HNW individuals in Spain include:
- Offshore holding structures with hybrid instruments: Where a Spanish resident holds a foreign company that issues instruments characterised as equity in one jurisdiction and debt in another (creating deductible payments without corresponding taxable income)
- Aggressive treaty shopping: Using a company in a treaty-country jurisdiction to access reduced withholding tax rates, where the principal purpose is the tax benefit rather than genuine commercial activity
- CRS avoidance arrangements: Structures designed to prevent the automatic reporting of account information under the Common Reporting Standard — for example, using certain types of cash-value insurance products that are not reportable under CRS, or exploiting reporting institution exemptions
- Private foundation structures: Foundations in jurisdictions that are not CRS-participating, or where the reporting obligations are unclear, may trigger Category D hallmarks
- Intra-group cross-border transactions: Transfer pricing arrangements, particularly those involving intangibles or the transfer of business functions, may trigger Category E hallmarks
- Loss-utilisation structures: Acquisitions of loss-making entities for the purpose of using accumulated tax losses across borders
Penalties for Non-Disclosure in Spain
Spain's DAC6 penalty regime is stringent. The penalties for failure to comply with reporting obligations include:
- Failure to file Modelo 234: Fixed penalty of €2,000 per omitted data item, with a minimum of €4,000 and a maximum of €20,000 per arrangement not disclosed within the deadline
- Incomplete or inaccurate filing: Fixed penalty of €2,000 per omitted or incorrect item
- Use of a structure known to be reportable but not disclosed: The taxpayer faces a penalty of €25,000 for the first breach and €200,000 for subsequent breaches in the same tax year
- Refusal to provide information to AEAT in an inspection: Penalties of up to €200,000
These penalties are in addition to any tax assessment that may result from AEAT's use of the disclosed information — DAC6 reporting does not create legal certainty that an arrangement is acceptable; it merely notifies the tax authority of the arrangement's existence.
Professional Secrecy and Legal Privilege in Spain
Spanish law (Ley General Tributaria and the Estatuto General de la Abogacía) protects legal professional privilege for communications between a lawyer and their client made for the purpose of providing legal advice. Under the DAC6 implementing rules, Spanish lawyers (abogados) who are intermediaries can invoke professional secrecy to avoid disclosing details of client arrangements — but only where the privileged information was obtained in the context of providing legal advice in their capacity as a lawyer.
Where professional secrecy is invoked, the Spanish lawyer must notify the client that the reporting obligation falls on them (the client), and the client must then self-report. The privilege does not eliminate the reporting obligation — it merely shifts it from the lawyer to the taxpayer.
Tax advisers who are not lawyers (asesores fiscales) do not enjoy the same professional secrecy protection and must report regardless of the confidential nature of their advice.
Advice for UK Advisers Post-Brexit
Following Brexit, the UK is no longer bound by the EU DAC6 Directive. The UK introduced its own domestic equivalent (the International Tax Enforcement — Disclosable Arrangements rules), which covers a narrower range of hallmarks than DAC6 (primarily Category D — CRS avoidance). For UK-based advisers structuring arrangements that involve Spanish residents or Spanish-connected assets:
- The UK adviser will generally not have a Spanish DAC6 reporting obligation themselves (as they are not EU-based)
- However, if the UK adviser is the only intermediary and there is no EU-based intermediary, the reporting obligation falls on the Spanish-resident taxpayer
- UK advisers should be aware that their Spanish clients may have DAC6 obligations and should flag this in their client communications
- Arrangements designed and structured by UK advisers are not exempt from DAC6 where the Spanish taxpayer participates
DAC6 Compliance: Expert Advice for Advisers and Taxpayers
Whether you are an intermediary assessing your reporting obligations or a taxpayer who has implemented a cross-border arrangement, DAC6 compliance in Spain requires specialist analysis. Jacob Salama advises on DAC6 hallmark assessment, reporting procedures, and AEAT enquiry management.
Book Your Consultation →Disclaimer: This article is for general informational purposes only and does not constitute legal or tax advice. Spanish tax law changes frequently and its application depends on individual circumstances. Always consult a qualified tax lawyer before making decisions. SALAMA LEGAL SLP — Colegiado nº 11.294 ICAMálaga.