Compliance
Compliance Simplified: DAC Recast & What Businesses Need to Start Doing Now
With the pending DAC Recast from the June 2026 simplification package, businesses must adapt reporting, exchange of information, and administrative cooperation strategies long before final enactment.
By NomadicTax Research Team • 5-8 min read • August 14, 2026
## What Is DAC Recast?
- **Recast of Directive on Administrative Cooperation (DAC)** is part of the EU Commission’s **Tax Simplification Package** introduced on **24 June 2026**. It aims to combine all nine existing DAC directives into one coherent legal framework. ([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?utm_source=openai))
- Will reduce various reporting obligations—especially for multinational enterprise groups already under the EU global minimum tax (Pillar 2)—and cut compliance costs by over **€1 billion annually**. ([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?utm_source=openai))
- Key features include raising thresholds for online sales of goods (thus excluding many private or second-hand sellers), eliminating duplicate country-by-country or top-up tax notifications, and simplifying taxpayer identification tools. ([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?utm_source=openai))
## Key Impacts on Compliance Requirements
### Reporting Obligations
- Multinational enterprises (MNEs) under Pillar 2 will see **relief** from certain cross-border tax arrangement reporting as of DAC Recast. ([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?utm_source=openai))
- Private sellers and platforms may be relieved if their volumes fall below new thresholds for online goods; a large chunk of low-value cross-border arrangements is being carved out. ([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?utm_source=openai))
### Tax Authority Cooperation & Data Sharing
- Stronger tools for identifying taxpayers via unified tax IDs or verification tools—this helps ensure accurate information exchange. ([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?utm_source=openai))
- All categories of income and capital are included; data exchange widened. ([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/taxation/tax-transparency-cooperation/administrative-co-operation-and-mutual-assistance/directive-administrative-cooperation-dac_en?utm_source=openai))
## Preparatory Steps for Businesses Now
- **Audit current reporting workflows**: Identify where your company submits DAC6, DAC1, Pillar 2 notifications, etc. Note redundant or duplicate filings now targeted by simplification.
- **Check platforms and third-party partners**: Assemblers of online goods, marketplaces or logistics providers need to align their systems to new thresholds and PID requirements. Some firms may no longer need to report cross-border arrangements if falling under new thresholds.
- **Implement or verify taxpayer identification systems**: Make sure your internal systems capture data sufficient to feed into new verification tools required under DAC Recast.
- **Forecast cost savings**: Use the estimates from the EU package (business savings ~ €1 billion/year) to budget for implementing system upgrades; invest earlier to benefit sooner. ([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?utm_source=openai))
## Potential Risks & Transitional Issues
- Legal timelines remain uncertain: proposals (Omnibus & DAC Recast) must still be adopted by **European Parliament & Council**; until then, current rules continue. ([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?utm_source=openai))
- National transposition delays are common. Member States may lag in implementing revised DAC obligations, especially for Pillar 2 top-up tax returns. ([malta.representation.ec.europa.eu](https://malta.representation.ec.europa.eu/news/july-infringements-package-key-decisions-2026-07-08_en?prefLang=de&utm_source=openai))
- Complexity around Pillar 2 overlaps: even with simplification, some existing Country-By-Country Reports or tax return obligations will still remain for many large MNEs.
## Example Compliance Scenario
A tech company with subsidiaries in Spain, Germany and Poland currently files multiple cross-border arrangement reports under DAC6 and separate top-up tax filings under Pillar 2. Under DAC Recast, some of these are eliminated—or combined—reducing duplication. Additionally, if certain transactional volumes fall below updated thresholds (such as small sales of online goods), that lowers reporting burdens.
## Bottom Line
Compliance under DAC and Pillar 2 is a fast-evolving area. Companies should prepare now for simplification, but also stay current on adoption status in their Member States. Those who adapt early, streamline internal reporting and leverage the thresholds and exemptions, will be best positioned to save cost and risk.