DAC6/DAC7: What European Tax Authorities Already See About Your Structure

Disclaimer: This material is provided for general informational purposes only and does not constitute individual legal or tax advice. Assessing whether DAC6/DAC7 apply to your structure requires an analysis of the relevant facts, documents, and the group’s jurisdictions.
Information date: December 2025 (based on the sources listed below).

Introduction: Why the “Quiet Harbor” Is No Longer Quiet

If you own a Cypriot holding company, a Dutch structure, or simply sell on Amazon from Ukraine, you should operate on a presumption: the tax inspector already knows more about your structure than you think.

By November 2024, the central DAC6 database had received over 60,700 reports of cross-border arrangements. Since September 2024, Ukraine has joined automatic tax information exchange and has already exchanged data with more than 118 jurisdictions. The era of “invisible” structures is over.

The times when you could live by the logic “if I didn’t file a report, nobody will know” are gone. In 2024–2025, this logic is a direct route to multi-million fines and reputational collapse.

European tax authorities have long stopped working in the “requested — received — checked” mode. They are building infrastructure: regular, standardized, and automatic information exchange across EU countries. The key shift of the last 18 months is not that “new rules appeared,” but that the rules began producing large datasets that tax authorities can already match and convert into a risk profile.

1. Context and relevance: Why 2024–2025 is a turning point

Three events that changed everything

First: On 30 September 2024, Ukraine carried out its first automatic exchange of financial information under the CRS standard. Data on bank accounts of Ukrainian residents in the EU now automatically flows to the State Tax Service of Ukraine. According to Deloitte Ukraine, the exchange already covers 118 partner jurisdictions.

Second: In January 2024, the first DAC7 reporting cycle went live. Amazon, Airbnb, Upwork, and hundreds of other platforms provided EU tax authorities with income data for all sellers for 2023. Thresholds are minimal: for services and rentals there is no threshold at all; for goods — €2,000 or 30 sales per year.

Third: In July 2024, the Court of Justice of the European Union, in case C-623/22, confirmed the full legality of DAC6. The Directive does not violate legal certainty or privacy principles. The disclosure regime will remain in place and will be tightened.

What changed for Ukrainian beneficial owners

For Ukrainian owners, the “stitching” effect matters most. Tax and compliance risks rarely arise from a single source today. They are triggered by a combination of:

• EU tax information exchange under DAC6/DAC7;

• financial data under CRS;

• beneficial ownership data from UBO registers and AML frameworks.

Ukrainian businesses with turnover of $1–20 million are classic users of Cypriot, Maltese, and Dutch structures. For such companies, DAC6 and DAC7 are not abstract EU rules but a practical reality determining what EU tax authorities across all 27 Member States will see about your international tax planning.

Why the concept of an “invisible structure” is obsolete

Until recently, many structures were built around the idea “keep a low profile — and nobody bothers us.” In 2025, this sounds like “we don’t log events — therefore we have no cyber risk.”

Tax transparency has become systemic. Disclosure of tax arrangements (DAC6) and platform-economy income (DAC7) brings many “grey zones” into an observable field. The debate has shifted: not “will they find out,” but “what exactly will they learn, how will they interpret it, and what questions will they ask.”

2. DAC6: The mechanics of cross-border disclosure

What DAC6 is and who it applies to

Directive 2018/822 (DAC6) requires intermediaries — tax advisers, lawyers, banks, corporate service providers — to report cross-border tax arrangements that meet certain hallmarks. The Directive entered into force on 1 July 2020 and retrospectively covers arrangements from 25 June 2018.

Important: DAC6 is not “about offshore” — it is about risk signals. The definition of “intermediary” goes beyond tax advisers. Banks, lawyers, corporate providers — anyone who “designs/markets/organizes/makes available for implementation/manages implementation” or provides assistance in that respect may be captured.

Who must disclose: intermediaries vs taxpayers

The default logic: the intermediary is the first reporting party. However, the obligation shifts to the taxpayer if:

• the intermediary is located outside the EU;

• the arrangement is developed in-house (without an intermediary);

• the intermediary relies on legal professional privilege and notifies the client accordingly.

Practical takeaway: working with a non-EU adviser does not mean there is no disclosure. More often, it means you may become the reporting party directly.

DAC6 hallmarks: five categories (A–E)

Hallmarks are indicators that make a cross-border arrangement reportable. Some hallmarks apply only if the Main Benefit Test (MBT) is met (i.e., obtaining a tax advantage is the main or one of the main benefits). Others are “hard” hallmarks and do not require MBT.

Category A: General hallmarks (MBT required)

Category B: Specific hallmarks (MBT required)

Category C: Cross-border transactions (partly MBT-dependent)

Category D: CRS circumvention and opacity (NO MBT)

For Ukrainian beneficial owners, this category is the most critical. D hallmarks trigger automatically.

Category E: Transfer pricing (NO MBT)

Deadlines and penalties

Reporting deadline: 30 days from when the arrangement becomes available for implementation or when the first step in implementation is taken.

Penalties vary significantly by EU country:

3. DAC7: When a marketplace becomes a tax informant

How it differs from DAC6

If DAC6 is about disclosing tax arrangements (structures/arrangements), DAC7 is about large-scale collection of income data via platforms. DAC7 does not require the seller to have any “scheme.” Platform activity alone is enough for data to be reported.

Directive 2021/514 has applied since 2023. The first reports for 2023 were filed on 31 January 2024. Data exchange between EU tax authorities was completed in February 2024.

Activities under reporting

DAC7 covers four categories of relevant activities:

1. Rental of immovable property (residential and commercial) — Airbnb, Booking.com

2. Personal services — Upwork, Fiverr, freelance platforms

3. Sale of goods — Amazon, eBay, Etsy, Vinted

4. Rental of means of transport — car sharing, rentals

What exactly is disclosed

Individuals:

• full name, address, date of birth;

• TIN (tax identification number);

• bank account details;

• country of tax residence.

Businesses (in addition):

• registration number;

• permanent establishment information.

Transactions:

• total consideration per quarter;

• number of transactions;

• platform fees;

• for property: address and number of rental days.

Thresholds and exclusions

Practical consequences

E-commerce sellers (Amazon, eBay, Etsy): if you are a Ukrainian tax resident selling in the EU above the thresholds, your income data is automatically transmitted to your country of residence, including Ukraine.

Freelancers (Upwork, Fiverr): all payments are reportable regardless of amount. Earned €100 on Fiverr — it will be reported.

Landlords (Airbnb, Booking.com): property address, number of rental days, and income amounts are all in tax databases. Mismatch against declared income becomes obvious.

DAC7 penalties:

4. How it works in practice: From data to a risk profile

Integrating data sources: four analytical layers

EU tax authorities use Big Data analytics to match information. This is what the picture looks like from an inspector’s perspective:

Layer 1: CRS (banking data). A bank reports that Company X received €5 million, and the beneficial owner is Mr. Y, a Ukrainian resident.

Layer 2: UBO registers. A beneficial ownership register confirms Mr. Y controls Company X.

Layer 3: DAC6. The tax authority checks disclosure databases. Was the transaction part of an aggressive arrangement? If a lawyer filed a report with hallmark code C1, the system links it to the bank transfer.

Layer 4: DAC7. If Company X sells via a marketplace, the tax authority reconciles CRS inflows with the platform report under DAC7.

Analytical capabilities of tax authorities

The UK’s HMRC illustrates what modern tooling can deliver:

• the Connect system contains 55 billion data points on taxpayers;

• in 2024/25 it generated £4.6 billion in additional revenues — 35% above the historical annual average;

• 540,000 cases of undeclared taxes were identified.

Italy’s VeRa system uses AI to match returns against banking data, real estate, and electronic payments. More than one million high-risk cases have been identified.

Why “invisibility” is impossible: a typical structure

Consider a typical Ukrainian structure: beneficial owner — Ukrainian resident; holding — Cyprus; operating company — EU.

Tax authorities can access:

1. Cyprus UBO register: beneficial ownership data

2. CRS: information on the beneficial owner’s accounts in European banks

3. DAC6: if hallmarks apply (especially D.2), it has already been reported

4. DAC3: any tax rulings

5. Since September 2024: CRS data flows directly to the Ukrainian tax authority

Triangulation takes seconds: if CbCR shows high profit in a low-tax jurisdiction with minimal substance, and the UBO register points to a Ukrainian beneficial owner, this becomes an automatic audit trigger.

Ukraine within the exchange framework

• 30 September 2024: Ukraine’s first automatic exchange

• Ukraine received data from 50+ jurisdictions and sent data to 30+

• Partners include all EU countries, the UK, the UAE, Switzerland

• September 2025: the next exchange will cover all account categories, including accounts below the $1 million threshold

Summary table: what tax authorities “see”

Important: during martial law, information on accounts up to $250,000 cannot be used to determine tax liabilities in Ukraine. This is a temporary relief — the data continues to be collected and stored.

5. Real (anonymized) application cases

Case 1: Intra-group financing and margin decline

The group restructures financing into an intra-group instrument. The operating company’s margin drops sharply and recurring interest expense appears.

How it looked:

• under DAC6 — hallmarks in categories E/C (intra-group financing + TP);

• the review started with: “why this rate/terms/functions, and where are the benchmarks?”

Outcome: the CFO did not have a coherent package (policies, TP file, board minutes, cash-flow rationale). The discussion quickly became uncomfortable.

Case 2: Marketplaces and “personal” cards

A business sells via platforms, payouts go to multiple recipients (individuals/sole proprietors/different entities). Corporate reporting shows only “commission” or “marketing expense.”

How it looked:

• DAC7 made aggregate income visible;

• the tax authority matched it against returns and bank turnover.

Outcome: discrepancies were identified. Additional assessments plus penalties.

Case 3: “Opaque UBO” as a tax trigger

A Ukrainian businessman structured agricultural exports through a Dutch company. The structure was legally compliant but contained hallmark D.2 (concealment of the real beneficial owner).

How it looked:

• Dutch tax authorities received DAC6 information from a local adviser;

• banking operations arrived via CRS;

• beneficial ownership was confirmed via the UBO register.

Outcome: additional taxes and penalties exceeding €500,000. The structure had to be rebuilt.

Case 4: Cypriot holding and a dual request

A Cypriot company issued a loan to a related Luxembourg company to reduce the tax base via interest deductibility.

Previously: it could go unnoticed for years until an on-site audit.
Now:

1. the Luxembourg adviser classified the deal as an intra-group transfer hallmark;

2. a DAC6 report was filed;

3. data automatically reached Cyprus tax authorities;

4. Cyprus reconciled incoming interest with the tax return.

Outcome: a request to confirm substance and business purpose arrived from two jurisdictions within six months.

6. What to do: Practical recommendations

Self-check: quick diagnostic (if ≥3 “Yes” — deeper review is needed)

Three-step structure audit

Step 1: Inventory (1–2 weeks)

• register of all cross-border arrangements/transactions;

• identify what may be DAC6-relevant;

• determine the intermediary and the reporting jurisdiction.

Step 2: Hallmark analysis

• review each element against categories A–E;

• focus on categories D and E (no MBT required);

• key questions:

Additional checks:

• Is the company actually managed from the stated jurisdiction?

• Are there payments to low-tax jurisdictions without an economic rationale?

Step 3: Build a “compliance file”

• position paper for each risk element: business purpose, economic rationale, effect calculation, TP support;

• platform/CRS reconciliation data: a single “map of income recipients”;

• change control: run any changes in functions/risks/contracts through a “DAC/CRS/UBO impact check.”

When to seek professional support

Three scenarios where support is critical:

1. planning a new structure or major restructuring — DAC6 analysis should be embedded from day one;

2. identifying missed disclosure — proactive remediation is almost always better than waiting for a query;

3. receiving an inquiry from Ukrainian or EU tax authorities regarding your international structure — timing becomes critical.

Additional red flags:

• rapid growth in platform turnover (over $500k/year);

• presence of entities in EU-blacklisted jurisdictions;

• bank inquiries requesting proof of economic substance.

Strategy for moving to transparency

Key principle for 2024–2025: voluntary disclosure is better than forced detection.

International tax planning has not disappeared — it has changed. Structures built on secrecy are being replaced by structures built on economic justification.

Practical steps:

• document economic substance: for every transaction, a clear business purpose not driven by tax saving;

• simplify structures: minimize jurisdictions and intermediaries;

• digitize reporting: automated data collection for DAC7 compliance;

• ongoing monitoring: assign responsibility for tracking legislative changes.

Key takeaways

1. DAC6 has already disclosed over 60,700 cross-border arrangements — data is available to tax authorities across all 27 EU Member States and is used for risk profiling

2. DAC6 hallmarks in categories D and E do not require MBT — opaque ownership and significant profit reallocation can be reportable automatically

3. DAC7 covers the mass segment: no minimum threshold for services and rentals — any income on Upwork, Airbnb, or Fiverr can be reported

4. Ukraine has fully joined automatic exchange — the first CRS exchange took place in September 2024 with 118 jurisdictions

5. Non-compliance penalties reach hundreds of thousands of euros — the Netherlands provides up to €870,000 under DAC6 and €900,000 under DAC7

6. The “invisible structure” concept is technically obsolete — authorities aggregate UBO/CRS/CbCR/DAC6/7 data and apply AI analytics to detect inconsistencies

7. Proactive audit and compliance is the only rational strategy: remediation costs are typically an order of magnitude lower than defense costs during a tax audit

If you want to ensure your international structure complies with DAC6/DAC7 and does not create business risk, I recommend a professional audit. Our team can assess your current structure and risks and develop an optimal compliance strategy. Book a consultation and we will review your situation together.

Author: Sergey Lipatnikov

Prepared on the basis of official sources: EUR-Lex (Directives 2018/822 and 2021/514), the European Commission, the OECD Global Forum on Transparency, publications by Deloitte, PwC, EY, KPMG, Irish Revenue, and materials of the State Tax Service of Ukraine. All data is current as of December 2025.