What Is the DAC Recast?
The EU’s Directive on Administrative Cooperation (DAC) covers information exchange between Member States for tax, VAT, and financial transparency purposes. In June 2026, the European Commission adopted proposals to recast DAC to reduce compliance burdens, improve clarity, and align with modern practices. (taxation-customs.ec.europa.eu)
Key Changes Under the DAC Recast
| Area | Prior Position | What’s Changing | How That Affects Your Business |
|---|---|---|---|
| Reporting obligations under DAC6 (reportable cross-border arrangements) | All kinds of arrangements had to be reported. | Exclude entities already under Pillar 2 global minimum tax; remove hallmarks of limited added value. (taxation-customs.ec.europa.eu) | Less true low-risk reporting; focus shifts to meaningful risk spots. |
| Online sales of goods & digital platforms (DAC7) | Lower thresholds and more platforms required to report. | Higher monetary thresholds, removal of activity-based thresholds. (taxation-customs.ec.europa.eu) | Small sellers may be free from reporting; platforms have clarified responsibilities. |
| Duplication of notifications (DAC4 and DAC9) | Separate notices required for country-by-country reporting vs. minimum tax top-up returns. | Single notification obligation, harmonised deadlines and template. (taxation-customs.ec.europa.eu) | Less redundant filings; simpler deadlines and documentation. |
| Identification & data quality | Varied national TIN rules; frequent mismatches. | Centralised TIN verification system for tax authorities; optional for businesses. (taxation-customs.ec.europa.eu) | Streamlined audits, fewer mismatches; integrate TIN collection in onboarding. |
| Completeness of income/capital info under DAC1 | Includes categories that are outdated or low-value. | Remove life insurance product category; exchange all remaining categories automatically. (taxation-customs.ec.europa.eu) | Investors and policy-holders should know what’s disclosed; make sure correct records are kept. |
Practical Steps for Compliance
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Audit existing reporting scopes: Identify if you're reporting under DAC6, 7, etc.; confirm what qualifies under priority rules.
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Update systems to support central TIN verification. Align your backend data with EU-wide templates.
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Train your teams and advisors on what hallmarks are being removed and which ones carry continued risk.
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Review contracts and structures, especially for group entities affected by Pillar Two exclusions.
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Stay aware of timelines: Proposed rules still need EU Parliament/Council adoption; implementation follows thereafter. (taxation-customs.ec.europa.eu)
Examples to Illustrate
- A medium-sized digital platform in France earning < EUR 3,000/month from online sales may no longer be under DAC7 reporting once the recast is adopted. |
- A multinational group already paying or captured under Pillar Two IIR would now be excluded from DAC6 reporting for certain arrangements. |
Risks If You Don’t Act
- Fines for misreporting or nondisclosure of cross-border arrangements. |
- Increased audit exposure if categorisation of your business or income types does not match EU-wide templates. |
- Missed opportunities for cost savings and reduced administrative burden. |
Timeline & What to Watch
- June 2026: Proposals adopted by the Commission. (taxation-customs.ec.europa.eu)
- Next steps: EU Council and Parliament must approve; transposition into national law follows. |
- Businesses need to plan now for data system changes and workflows. |
Conclusion
The DAC recast is not just another regulation — it’s a shift toward smarter, leaner reporting. Familiarize yourself with what stays vs. what goes, align your operations, and you’ll reduce compliance risk while minimizing overhead.