On 28 October 2024, the EU Commission put forward a directive proposal, called the DAC9 Proposal, amending the Directive on administrative cooperation in the field of taxation for the ninth time to make it easier for companies to fulfil their filing obligations under the 2022 Pillar Two Directive which aims to ensure a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the EU.
The DAC9 Proposal aims to ensure the uniform and cross-cutting implementation of the rules on filing the GloBE Information Return across Member States and enables multinational enterprise groups to fulfil their Pillar Two filing obligations only once in the Member State of the ultimate parent entity or of a designated filing entity as opposed to having to file a GloBE Information Return in each Member State where constituent entities are located.
To implement reporting obligations and an exchange of information framework that supports the Pillar Two Directive, the DAC9 Proposal:
- introduces a standard form, in line with the one developed by the Inclusive Framework of the OECD, which multinational enterprise groups and large-scale domestic groups will have to use to report certain tax-related information in a centralised manner; and
- sets up a system for tax authorities to exchange information with each other.
For once, the Directive on administrative cooperation is not amended by the addition of new reporting obligations. The DAC9 Proposal rather supports the practical implementation of the reporting obligations under the Pillar Two Directive. This proposal is consistent with and contributes to the Commission’s efforts to rationalise and simplify reporting obligations as well as to reduce the administrative burden for businesses, which is set out as a priority in the Commission work programme 2024.
Hereafter, our Tax Partner, Andreas Medler, and Chief Knowledge Officer, Marie Bentley, will analyse the DAC9 Proposal and its implications for Luxembourg companies.