On 11 March 2025, the Economic and Financial Affairs Council (“ECOFIN”) reached a political agreement on the amendment of Directive 2011/16/EU on administrative cooperation in the field of taxation (“DAC”) to ease Pillar 2 filing obligations and implement the exchange for Pillar 2 information returns within the EU (“DAC9”). The EU Commission (“EC”) finally adopted the proposal on 14 April 2025.
Background
The proposal for DAC9 was introduced on 28 October 2024 by the EC with the key objective of providing for the operational arrangements to allow groups within the scope of Directive 2022/2523 (the “Pillar 2 Directive”) to make use of the single filing option provided by Article 44 of this Directive (see our previous newsflash) and ensure proper exchange of relevant information to relevant EU Member States. The standard reporting obligations under the Pillar 2 Directive involves a reporting by each constituent entity with its relevant tax authority while the single filing option involves one filing by the Ultimate Parent Entity (“UPE”) or a designated constituent entity. However, the use of this option is subject to the existence of a qualifying competent authority agreement that provides for the automatic exchange of annual top-up tax information returns and DAC9 will constitute such agreement within the EU.
The Polish Presidency of the EU treated the DAC9 proposal as a priority and ensured that Member States reached an agreement in March.
Key amendments
The key change aims at ensuring that the Top-up Tax information return standard format as annexed to DAC9, remains aligned with the latest version of the GloBE Information return (“GIR”), the reporting format developed by the OECD which is subject to updates.
The standard model annexed to the agreed version has been updated in line with the OECD update of the GIR model on 15 January 2025 (after the release of the DAC9 proposal by the EC).
In order to maintain the EU reporting format in line with the OECD model, the initial proposal provided that, where required, the DAC9 appendix pertaining to the Top-up Tax information return standard form would be updated through delegated acts by the EC which was not approved by all Member States. The consensus version requires the amendments to take place through a Council Directive, thus requiring unanimous approval from EU Member States.
The DAC9 mechanism intends to mirror, within the EU, the Multilateral competent authority agreement on the Exchange of GloBE information (“MCAA”) developed by the OECD/G20 Inclusive Framework on BEPS and the signature of which would still be required for exchanges with third countries. Recital 16 of the updated DAC9 proposal provides that in implementing DAC9, Member States can use the MCAA together with relevant OECD commentary as a source of interpretation.
Next step
The DAC9 will now be published in the Official Journal of the European Union and the transposal deadline remains set for 31 December 2025.
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