Brussels: Europe and the Arabs
The Council of the European Union Member States adopted on Monday Directive (DAC9) aimed at expanding cooperation and information exchange in the area of ​​effective minimum corporate tax.
According to a European statement distributed in Brussels, this directive aims to implement specific provisions of the Pillar 2 Directive, which implemented in the European Union the G20/OECD Global Compact on International Tax Reform.
This international agreement was reached to limit competition on corporate tax rates, reduce the risks of base erosion and profit shifting, and ensure that the largest multinational groups pay the agreed global minimum corporate tax.
The Pillar 2 Directive ensures that the profits of the largest multinational and domestic groups or companies (with annual turnover of at least €750 million) are taxed at a minimum effective rate of 15%.
More transparency and simplified reporting
DAC9 updates the current EU Administrative Cooperation Directive (DAC) by expanding tax transparency rules. This Directive simplifies the reporting process for large companies by enabling centralized filing of the Supplementary Tax Information Return (TTIR), meaning that one company files on behalf of the entire group, rather than local filing, meaning that each company files its own return. This Directive introduces a standardized template for filing the Supplementary Tax Information Return across the EU, in line with the model developed in the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
Directive No. 9 also extends the framework for automatic exchange between Member States to include the Supplementary Tax Information Return.
The DAC Directive will enter into force the day following its publication in the Official Journal of the European Union. Member States must adopt and publish the laws, regulations, and administrative provisions necessary to comply with this Directive by 31 December 2025. The first supplementary tax return is due by 30 June 2026.
Countries that choose to postpone the implementation of the Pillar 2 Directive must still implement Directive 9 by the same deadline.
The European Commission previously proposed Directive 9 (DAC9) in 2024, aiming to implement specific provisions on supplementary tax information returns contained in EU Council Directive 2022/2523 of 15 December 2022 on ensuring a global minimum tax for multinational enterprise groups and large-scale domestic groups (Pillar 2 Directive). The Pillar 2 Directive transposed into EU law a landmark agreement on international tax reform reached within the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS). The European Parliament was consulted on the DAC9 proposal and issued its opinion on 12 February 2025.