The first Infoline conference “Operational Taxes for Banks” took place in London in June. Now a second conference with the same title followed in Zurich, Switzerland in November 2018. In our view, the main topic of this conference was clearly DAC 6, which will be the “next big issue” from a regulatory perspective. It seemed to SDS as if the importance of this topic has not yet been fully recognised by all institutions. We see two reasons why this might be the case.
SDS took part in both conferences as an exhibitor and sponsor. Both conferences have been very informative, with lots of interesting and knowledgeable speakers from all parts of the financial industry and many interesting discussions.
Although both conferences used the same title, it was interesting to see how the topics of the conference have evolved during these few months since the event in London. In our view, the main topic of this conference was clearly DAC 6, which will be the “next big issue” from a regulatory perspective.
However, it seemed to SDS as if the importance of this topic has not yet been fully recognised by all institutions. We see two reasons why this might be the case:
- It is not yet clear which department in a financial institution will be responsible for the implementation, and no department feels responsible. DAC 6 is a reporting requirement, but it is also strongly related to tax, compliance, risk management and even the core business. Depending on the business model of a financial institution and its customer base, the topic could be located in either department, but it is clearly a cross-functional topic which needs to be addressed as such. Clearly, this makes it even more necessary to start thinking about the implications as early as possible.
- Since it is “only” a directive, the EU member states are responsible for the country-specific implementation, and they have to finalise the requirements by the end of 2019 and provide the necessary guidance. This gives financial institutions the feeling that there is still ample time and it is impossible to start now without the final regulations. However, it should be considered that reporting starts in mid-2020. It will be impossible to wait until the end of 2019 and then have a solution ready within half a year.
Financial institutions will have to prepare for DAC 6 much earlier, even if not all requirements are already yet. This is especially true for institutions which are operating in several countries, since it must be expected that the different countries will issue different requirements, a practice to which we are already familiar from CRS reporting.