Compliance

Compliance Simplified: Anticipating the DAC Recast and Omnibus Changes

The EU’s upcoming Recast of the Directive on Administrative Cooperation (DAC) and the Direct Taxation Omnibus will simplify reporting obligations, enhance cross-border tax transparency & reduce compliance costs.

By NomadicTax Research Team • 5-8 min read • September 4, 2026

## What’s Changing Under the DAC Recast & Direct Taxation Omnibus In **June 2026**, the European Commission announced a **Tax Simplification Package**, consisting of two key legislative proposals: the **DAC Recast** and the **Direct Taxation Omnibus**. These aim to streamline administrative obligations, enhance the internal market’s competitiveness, and make enforcement more effective—all while preserving the EU’s strong stance against tax fraud and avoidance. ([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)) Core changes include: - Abolishing withholding taxes on cross-border dividends, interest & royalties among EU companies. ([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)) - Extending exemptions under the Parent-Subsidiary Directive to pension institutions for EU-received dividends. ([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)) - Full and immediate expensing of R&D-related tangible assets in all Member States. ([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)) - Harmonizing and simplifying **DAC6 and CFC rules**, refining or removing certain hallmarks under DAC6. ([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)) - Streamlining notifications for country-by-country reporting and top-up tax filings under DAC4/DAC9. ([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)) - Increasing monetary thresholds for online sales under DAC7 to relieve over-burdened small sellers, especially in second-hand goods. ([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)) ## Implications for EU Entities - Companies selling online platforms goods will likely be **exempted** from DAC7 reporting if they are small or sell second-hand items under new thresholds. This could mean millions of private sellers are out of scope. ([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/document/download/bee8b767-1f9e-44aa-9910-faa8bc31a880_en?filename=190626_Tax+Simplification+Package_Factsheet_.pdf&utm_source=openai)) - Multinational groups need to coordinate across jurisdictions to ensure consistent filing for both country-by-country and top-up tax reports. Divergent deadlines/templates induce risk. ([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)) - CFC rules will be clearer: with refined hallmarks, and with better alignment with Pillar Two rules, compliance burdens should reduce. Entities with operations in low ETR jurisdictions must review 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)) ## Action Steps to Prepare - **Audit current reporting obligations**: Map what DAC6, DAC7, DAC4, DAC9 each require in your jurisdictions. Identify hallmarks under DAC6 that may be removed or refined—those are strong candidates for review. - **Check your entity structure and sources of income**: Withholding tax removal under the Parent-Subsidiary Directive for pension funds could open planning opportunities. If your group has a pension institution, ensure eligibility and timing. - **Implement systems for unified filing**: The proposals point toward a single notification template and harmonised deadlines for DAC4 and DAC9. Early alignment of IT and reporting calendars will save significant costs. - **Stay updated on national transposition laws**: While proposals were made in June 2026, actual national laws need to be passed. Timing will vary—some Member States may delay. Use this window to anticipate and adjust. ## Example Scenario Suppose you run an EU-wide platform enabling sales of handmade second-hand art from private sellers. Currently, you may need to report via DAC7 if online revenues exceed low thresholds. Under the Recast, with thresholds increased and second-hand goods possibly excluded, many private sellers will be removed from reporting requirements—dramatically simplifying your compliance obligations. Or consider a pension fund in Belgium: dividends received from subsidised EU-subsidiaries may now be exempt from withholding tax under the extended Parent-Subsidiary Directive—offering tax savings if you align cross-border investment structures proactively. ## Risk Factors to Monitor - Transition periods and grandfathering clauses: Many proposed rules will begin after securing agreement in Parliament and Council, and after national laws are adopted. - Member State divergence: Some may apply stricter rules despite harmonisation proposals, especially around CFC and withholding tax. - EU political dynamics: Resistance in certain States to withholding tax removal or expensing for R&D could delay outcomes or lead to opt-outs. By taking these compliance-oriented steps now, businesses across the EU can reduce costs, minimise risk, and be ready to make the most of the simplification package once enacted.