Compliance
Compliance Checklist for EU Businesses Under the DAC Recast Proposal
The upcoming DAC Recast introduces major changes in reporting obligations—here’s how EU businesses can ensure they stay compliant and reduce risk as law evolves.
By NomadicTax Research Team • 5 min read • August 18, 2026
## What’s Changing with the DAC Recast Proposal
The DAC Recast proposal (adopted 24 June 2026) aims to consolidate and simplify the framework under Directive 2011/16/EU. Key changes include:
- **Merge multiple reporting obligations** into a streamlined instrument, reducing duplication. ([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/news/european-commission-proposes-landmark-tax-simplification-package-streamline-compliance-and-boost-2026-06-24_en?prefLang=fi&utm_source=openai))
- **Exemptions for groups subject to Pillar Two**: Reportable cross-border arrangements for multinational enterprise groups under the 15% global minimum tax will cease to require certain disclosures. ([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/news/european-commission-proposes-landmark-tax-simplification-package-streamline-compliance-and-boost-2026-06-24_en?prefLang=fi&utm_source=openai))
- **Relaxed reporting for digital platforms and online sellers**: Higher thresholds for online goods’ reporting and fewer obligations for private sellers. ([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/news/european-commission-proposes-landmark-tax-simplification-package-streamline-compliance-and-boost-2026-06-24_en?prefLang=fi&utm_source=openai))
---
## Compliance Risks & Who this Affects
- **Multinational companies** with cross-border operations—they’ll need to update protocols for DAC-related reporting under both national and EU law.
- **Digital platforms and online marketplaces**, especially SME sellers—risks stem from misunderstanding revised thresholds and obligations falling on platforms.
- **Tax advisors and intermediaries** must stay current with evolving definitions and disclosure rules to avoid penalties under DAC frameworks.
---
## Key Compliance Actions to Take Now
1. **Map existing DAC obligations** across all jurisdictions you operate in—identify cross-border deals, intercompany arrangements, and related party loans.
2. **Determine Pillar Two coverage**: If your group is caught, understand which reporting obligations may be lifted under DAC Recast to reduce redundancy.
3. **Update reporting systems** for high-value online sales, digital platforms—make sure automated tools separate private sellers from commercial ones.
4. **Be ready to adapt to new definitions and formats**: DAC Recast will bring new notification obligations, data exchange standards, probably moving toward machine-readable formats. Ensure your technical infrastructure supports them.
5. **Review documentation and internal governance**: clear roles for who ensures DAC compliance (legal, tax, operations), and check for record-keeping sufficient to demonstrate you're meeting obligations even when reporting is relaxed.
---
## How to Stay Informed
- Track progress of the proposals through the European Parliament and Council—is the final version aligned with your risk profile?
- Monitor Member States’ transposition and guidance, since directives need implementing laws—there will likely be variation in deadlines and interpretation.
- Use official Commission sources (Taxation & Customs Union DG, EUR-Lex) for final texts. Advisory firms (EY, KPMG, etc.) can help translate proposals into practical checklists.
---
## Practical Example
Imagine a tech platform operating in multiple EU countries facilitating online sales by private individuals. Under current DAC, platform might need to report many product sales. Under DAC Recast, if sales thresholds are higher and private sellers exempt, many of these reporting obligations disappear—saving time and avoiding avoidable penalties. But platform must adjust software so only commercial sellers trigger reporting.
---
## Summary
The DAC Recast offers EU businesses a chance to streamline reporting, reduce redundant disclosures, and lessen administrative burden. However, it also introduces shifting thresholds and definitions. Businesses that proactively audit their exposures, update systems, and prepare for final law implementation will be best placed to stay compliant and benefit from the changes.