On March 11, 2025, the Council of the European Union reached a political agreement to amend Directive 2011/16/EU on administrative cooperation in taxation, commonly known as DAC9. With this amendment to EU Law, the European Union aims to streamline multinational enterprise groups’ (MNEs) filing obligations.
Key Features of the DAC9 Amendment
- Centralized Reporting: MNEs can now file a single top-up tax information return at the central level for the entire group, eliminating the need for multiple filings by each constituent entity in different jurisdictions.
- Standardized Reporting Form: The amendment introduces a uniform reporting form aligned with the template developed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). This standardization ensures consistency in MNEs’ information, facilitating more straightforward assessment and exchange among tax authorities.
- Enhanced Information Exchange: A system for EU member states’ tax authorities to effectively share tax information among themselves is to be established to promote transparency and administrative cooperation across the Union.
Implementation Timeline
- Transposition Deadline: EU Member-States must transpose DAC9 into their national relevant tax legislation by December 31, 2025.
- First Filing Deadline: MNEs are expected to file their initial top-up tax information return by June 30, 2026, as the Pillar 2 Directive stipulated.
- Information Exchange Deadline: EU Member-States’ tax authorities must exchange the collected information by December 31, 2026, ensuring timely and accurate data sharing.
Impacts on Multinational Enterprises
MNEs operating in the Union are expected to benefit from the following advantages to be implemented through the adoption of DAC9:
- Streamlined Compliance: thanks to a centralized reporting system, which will decrease the complexities of multiple filings across various jurisdictions.
- Standardization of Reports: A specific standard form for the submitted data will reduce variance and error.
- Administrative Simplicity: Automating the process will reduce the workload concerning reporting as it helps MNEs utilize their resources efficiently, allowing them to focus on core business activities instead of complicated compliance procedures.
Conclusion
The amendment introduced by DAC9 is truly a milestone in improving tax transparency and reducing the compliance burden on multinational enterprises in the Union. In this context, the EU aims to ensure fairness and efficiency in the taxation system within its single market while contributing to OECD GloBE goals.
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