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The European Commission has introduced a proposal to amend the Directive on Administrative Cooperation in the field of taxation (Directive 2011/16/EU – DAC). Known as DAC9, this proposal aims to streamline the filing process for companies subject to the Pillar 2 Directive (Directive (EU) 2022/2523), which establishes a global minimum tax level for multinational enterprise groups (MNEs) and large-scale domestic groups (LSDGs) within the EU.

Purpose of DAC9

DAC provides a standardized framework for tax authorities in EU Member States to cooperate on direct taxation matters. DAC9 builds on this by facilitating compliance with the Pillar 2 Directive, which requires MNEs to report their effective tax rate and pay any top-up tax if they fall below the minimum threshold.

Without DAC9, each entity within an MNE would need to file a separate top-up tax information return in its respective country, resulting in a complex and time-consuming process. DAC9 simplifies this by allowing MNEs to submit a single consolidated tax information return for the entire group at a central level.

Key Features of DAC9

To achieve this simplification, DAC9 introduces:

  • Information Exchange Among Tax Authorities: A system enabling seamless sharing of tax data between Member States.
  • Standardized Reporting Form: A uniform form aligned with international standards developed by the OECD and G20. This ensures consistency in the data reported by MNEs and LSDGs, making it easier for businesses to meet their obligations and for tax authorities to process and exchange the information.

The proposal also allows the European Commission to update the reporting form as needed, ensuring alignment with any international changes. This approach supports the EU’s broader goal of reducing administrative burdens and improving compliance.

Next Steps

Once adopted by the EU Council, Member States will have until 31 December 2025 to implement DAC9. The same deadline applies to countries that opt to delay the implementation of the Pillar 2 Directive.

MNEs will be required to file their first consolidated top-up tax information return by 30 June 2026. Tax authorities must exchange this data by 31 December 2026 at the latest.

This proposal marks a significant step towards simplifying tax reporting and enhancing cooperation between EU tax authorities, ultimately supporting the EU’s commitment to fair and efficient taxation.

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