EU Agrees New Rules to Streamline Global Minimum Tax Reporting

DAC9 - Who is in Scope?

The DAC9 framework applies to multinational enterprise (MNE) groups and large-scale domestic groups that are subject to the OECD's Pillar Two minimum tax rules. Broadly, this includes any group with annual consolidated revenue of €750 million or more in at least two of the four preceding fiscal years, as determined based on the financial accounting standards used in the group's consolidated financial statements. 

What DAC9 Does?

DAC9 is a reporting framework, not a new tax, that supports the effective implementation of the EU's Pillar Two Directive by ensuring that top-up tax information is collected and exchanged consistently across the EU. The aim is to reduce duplication, align with OECD standards, and promote transparency among Member States. DAC9:

1. Introduces a single, group-wide return - the TTIR

DAC9 introduces the Top-up Tax Information Return (TTIR), which must be filed by the ultimate parent entity or a designated filing entity of a multinational group or a large-scale domestic group that is within scope of the Pillar Two rules. This replaces the need for multiple local filings across different Member States, simplifying compliance for affected groups. 

The TTIR is closely aligned with the OECD's GloBE Information Return (GIR). It captures jurisdiction-level data such as:

• Revenues and income before tax
• Covered taxes and adjusted covered taxes
• Effective tax rate per jurisdiction
• Top-up tax liability and allocation
• Application of safe harbours or exclusions (e.g. de minimis, substance-based income exclusion)
• Any qualified domestic minimum top-up taxes (QDMTTs) imposed and credited

2. Creates a uniform EU-wide information exchange mechanism

Member States will automatically exchange TTIRs using a common digital format and secure communication channels, ensuring that all relevant tax authorities have access to the data they need for enforcement and risk assessment. 

This exchange:

• Occurs once per year, by 31 December of the year following the relevant fiscal year
• Covers all constituent entities located in the EU, and in some cases those in third countries with ties to the EU
• Requires Member States to store and process the exchanged data for at least five years and ensure data confidentiality

3. Provides a transitional simplified reporting framework

Recognising the complexity of the data required, DAC9 allows in-scope groups to apply a simplified reporting regime for fiscal years beginning before 31 December 2028. Under this transitional regime, groups can:

• Use safe harbours (including those under the OECD's transitional CbCR safe harbour rules)
• Provide estimates or aggregate data where exact jurisdictional splits are not feasible
• Reduce the compliance burden if the group has low-risk profiles or no top-up tax exposure

4. Coordinates with the OECD's international framework

DAC9 builds on the OECD's GloBE Model Rules and Administrative Guidance, ensuring that the EU remains aligned with the global approach to minimum tax implementation. It effectively transposes the OECD's GIR template into EU law, with only minimal changes to fit within the EU legal framework. 

Importantly:

• The TTIR may be updated in future to reflect changes made to the GIR by the OECD. Any such updates must now be adopted via a formal Council directive (not delegated acts by the Commission), ensuring political oversight and Member State control.
• A joint Council-Commission statement has committed to ensuring that the TTIR remains aligned with the GIR in substance, maintaining coherence between the EU and global reporting regimes.

5. Ensures coverage of deferring Member States and QDMTTs

Even where a Member State elects to defer the application of the Pillar Two rules (under Article 50 of the Pillar Two Directive), DAC9 still requires implementation of the TTIR and exchange of information by the end of that deferral period. 

Where a deferring Member State has implemented a Qualified Domestic Minimum Top-up Tax (QDMTT) ahead of full Pillar Two adoption:

• The TTIR must still be filed, and
• Information must still be exchanged in accordance with DAC9 timelines

6. Updates existing DAC rules to reflect Pillar Two Developments

In addition to introducing the TTIR regime, DAC9 also amends prior iterations of the Directive, particularly:

• DAC2 (financial account reporting) - updated to account for the revised definition of "financial institutions" and new reporting obligations arising under DAC8 and DAC9.
• DAC7 (digital platforms) - clarified to avoid overlaps or conflicting obligations for reporting platforms involved in Pillar Two data aggregation. 

Key Deadlines

Requirements                                                 Deadlines

Transpose DAC9 into national law               By 31 December 2025

First TTIR filing                                                By 30 June 2026

First exchange of TTIR data                          By 31 December 2026

Member States that have delayed applying the Pillar two rules under Article 50 of the Directive must still implement DAC9 by the end of their respective deferral periods. If a deferring Member State has implemented a Qualified Domestic Minimum Top-up Tax (QDMTT), DAC9 applies from the first fiscal year the QDMTT is in force.

What Changed from the Initial Proposed Text?

Following negotiations, several changes were made to the original proposal:

• Future updates to the TTIR template (Annex VII) will no longer be handled by the Commission alone via delegated acts. Instead, any updates must be adopted through a formal Council directive.
• A joint Council-Commission statement commits to quickly aligning the TTIR with future changes to the OECD's GIR template.
• Rules were added to govern information exchange involving Member States with deferral elections, including those that apply QDMTTs before adopting the full Pillar Two Rules.

What Businesses Should Do Now

1. Identify your filing jurisdiction - While the TTIR is filed at group level, groups can choose a designated filing entity.
2. Review data readiness - The TTIR requires detailed data across jurisdictions. Groups should ensure they have systems in place to track the required metrics consistently.
3. Consider simplified reporting elections - The transitional framework may reduce compliance burden, especially for groups with minimal or no top-up tax exposure.
4. Monitor for updates - Any future changes to the GIR at OECD level will eventually be mirrored in the EU framework. Staying ahead of these changes is essential. 

Get In Touch

DAC9 adds new reporting requirements for groups caught by Pillar Two. If you're in scope, now's the time to prepare.

Our team can help you understand what needs to be filed, when, and how - and make sure you're not duplicating work across jurisdictions.

Contact us to discuss how we can support your DAC9 and Pillar Two compliance.