Compliance
Compliance Reloaded: Staying Ahead of EU DAC Reporting Changes
As EU's DAC recast reforms move forward, businesses operating cross-border must adapt how information is reported to avoid penalties and make use of streamlined requirements.
By NomadicTax Research Team • 5-8 min read • September 3, 2026
## 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](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))
## 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](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai)) | 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](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai)) | 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](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai)) | 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](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai)) | 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](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai)) | Investors and policy-holders should know what’s disclosed; make sure correct records are kept. |
## Practical Steps for Compliance
- **Audit existing reporting scopes**: Identify if you're reporting under DAC6, 7, etc.; confirm what qualifies under priority rules.
- **Update systems** to support central TIN verification. Align your backend data with EU-wide templates.
- **Train your teams and advisors** on what hallmarks are being removed and which ones carry continued risk.
- **Review contracts and structures**, especially for group entities affected by Pillar Two exclusions.
- **Stay aware of timelines**: Proposed rules still need EU Parliament/Council adoption; implementation follows thereafter. ([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))
## 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](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))
- 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.