DAC8 Correction and Amendment Procedures

Errors in DAC8 reports are inevitable. Understanding the correction and amendment procedures is essential for maintaining compliance when mistakes are discovered.

Types of Corrections

DAC8's XML schema supports three types of message operations:

New data (CARF1). The standard annual report for a reporting period. This is submitted once per period and contains all reportable data.

Corrected data (CARF2). Used to correct specific elements of a previously submitted report. Corrections can modify user identification data, transaction amounts, or other reportable fields.

Deleted data (CARF3). Used to remove data that was incorrectly included in a previous report — for example, if a user was reported who should not have been, or if duplicate entries were submitted.

The DocRefId System

Every AccountReport in a DAC8 submission is assigned a unique Document Reference ID (DocRefId). This ID serves as the permanent reference for that specific data element across all subsequent messages.

When submitting a correction, the CASP must reference the original DocRefId of the element being corrected and provide a new DocRefId for the corrected version. This creates an audit trail that links corrections to the original data.

Common Correction Scenarios

Typical situations requiring corrections include incorrect TINs discovered after submission, user address changes that affect tax residency determination, transaction amounts recalculated due to fair market value adjustments, misclassified transactions (for example, an exchange reported as a transfer), and duplicate user entries that need to be consolidated.

Timing of Corrections

CASPs should submit corrections as soon as errors are discovered. While there is no universal deadline for corrections, tax authorities expect prompt action. Unreasonable delays in correcting known errors could be treated as non-compliance.

Some Member States may establish specific correction windows or deadlines. CASPs should monitor their home jurisdiction's guidance on correction procedures.

Best Practices

To minimize the need for corrections, CASPs should implement pre-submission validation that catches common errors before the report is filed. When corrections are necessary, they should be submitted promptly, documented thoroughly, and tracked internally to identify patterns that may indicate systemic data quality issues.

Conclusion

DAC8's correction mechanism provides a structured way to fix reporting errors, but CASPs should focus on data quality at the source to minimize the need for corrections. Maintaining a robust DocRefId management system is essential for accurate and efficient correction handling.