Mandatory Disclosure Regime (MDR)

Countries are implementing mandatory disclosure rules aimed at increasing transparency to detect what is perceived by tax authorities to be potentially aggressive cross-border tax planning. We can work with you to identify and help manage cross-border reporting obligations by leveraging our global network and up-to-date tools.

What EY can do for you

MDR will lead to extensive reporting obligations for a relatively wide range of transactions being classified as reportable arrangements. No jurisdiction other than Mexico has introduced any de minimis rules. Taxpayers and intermediaries (e.g. advisors, banks etc.) must implement policies, procedures and processes to identify and capture details of transactions that they may need to disclose. Penalties can be significant.

EY teams across the world can help taxpayers and intermediaries (e.g., advisors, banks etc.) identify and manage their obligations under the MDR. 

The far-reaching impact of DAC6 in Cyprus raises the need to automate compliance with the mandatory reporting obligations of cross-border arrangements for taxpayers and intermediaries as introduced by the tax disclosure rules of EU Council Directive 2011/16 (DAC6).

DAC6 Wizard (DAC6 Tool) has been designed by EY tax professionals of Cyprus to facilitate tool’s conformation to the rules and obligation and aims to assist Cyprus based intermediaries and relevant taxpayers to comply with their DAC6 obligations.

The obligation under DAC6 is not limited to the initial reporting made by intermediaries and/or taxpayers. In fact, this is just the beginning of the DAC6 compliance life cycle! Taxpayers and intermediaries will need to design and implement a DAC6 compliance program that covers the end-to-end MDR process. The DAC6 Tool helps you gather the necessary input to log the analysis of whether your cross-border arrangements are reportable in Cyprus and provides you with an audit trail of your analyses.

DAC6 Tool

No penalties will be levied for reports that were due to be submitted by 30 September 2021.

Be proactive and aim for compliance with the DAC6 Wizard:

  • Support of EY Cyprus tax and technology professionals in the development of the solution
  • A demo session provided by our EY MDR teams
  • A detailed user manual
  • 50 users to access the tool within your organization
  • Unlimited number of XML reports to be generated under the annual licence agreement

How can it help?

  Compliance aspect
Solution
1 Evolution of Mandatory Disclosure Rules (MDR), increase of the complexity
DAC6 Tool adopts a user-friendly step-by-step approach facilitating and structuring the thinking process in line with the rules and obligations introduced by the Cypriot DAC6 legislation
2 Considerable time spent on assessing and identifying potential reportable cross-border arrangements (RCBAs)
DAC6 Tool provides an interactive and intuitive environment to perform the appropriate MDR analysis leading to the identification of RCBAs in a timely and effective manner
3 Manual process to collect and consolidate the reportable information under the required format DAC6 Tool gathers reportable information and converts it into an XML-report file in line with the Cypriot XML schema, thus facilitating the submission to the “Ariadne” portal
4 MDR reporting is an ongoing compliance obligation, significant resources can be invested DAC6 Tool addresses the local ongoing reporting obligation by enabling a productive use of staff resources
5 Consequential penalties, controversy and reputational damage in case of non-compliance DAC6 Tool also functions as your complete digital audit trail of your compliance with Cyprus MDR rules thus providing you with proof in case of tax audit queries.
  • Access for users to log arrangements in a secure online environment
  • Dashboard with overview of all arrangements logged (including functionality to amend and delete)
  • Data input by completing an interactive questionnaire based on Cyprus MDR rules
  • Essential documents can be attached and uploaded for internal review and audit trail purposes
  • Completion of an assessment checklist that conforms to the rules and obligations introduced by the Cypriot DAC6 legislation
  • Identification of reportable arrangements
  • Data input of reporting information as required under the applicable Cypriot XML format
  • Dashboard for monitoring
  • Report generation per arrangement (XML schema)
  • Online repository of reportable arrangements
  • Concluding on the course of action required
  • Audit trail of analysis and course of action taken