DAC9 Proposal: GloBE Information Return and Pillar Two Reporting in the EU

The European Commission adopted a formal proposal on 28 October 2024 to extend the Directive on Administrative Cooperation to cover the exchange of Pillar Two top-up tax information between EU Member States. Known as DAC9, the proposal anchors the OECD's GloBE Information Return (GIR) template in EU law and sets out a centralised filing mechanism, a targeted dissemination model, and a firm exchange-of-information timetable. For accounting firms advising multinational groups with EU constituent entities, the operational consequences are significant and the planning window is shorter than it looks.

What DAC9 Actually Does

Standardising the Top-Up Tax Information Return

DAC9 does not create a new substantive tax. Its purpose is procedural: it gives the GIR a legal home inside the EU's administrative cooperation framework. The top-up tax information return that MNE groups will file closely mirrors the GIR template published by the OECD in July 2023. Crucially, the proposal allows future OECD updates to that template to flow through into EU law via Commission delegated acts, meaning the return can evolve without requiring a full Council directive each time.

Central Filing Option for EU Groups

One of the more practically useful features is the central filing option. Where the ultimate parent entity (UPE) or a designated filing entity is located in an EU Member State, it can file the top-up tax information return on behalf of the entire group in that single jurisdiction. This avoids duplicative filing obligations across multiple Member States.

There is a catch, though. Each constituent entity in every Member State, or a designated local entity acting on its behalf, must still notify its own tax administration of the identity of the filing entity and the jurisdiction where the filing is being made. Central filing reduces the compliance footprint, but it does not eliminate local notification obligations. Firms advising groups with a fragmented EU presence need to build that notification layer into their Pillar Two workflows. This is precisely where robust crypto compliance reporting processes and auditable record-keeping become indispensable, particularly for groups whose treasury and financing structures involve digital assets.

Information Exchange: How It Works

Between Member States

DAC9 establishes a dissemination model that mirrors the OECD's own approach from July 2023: Member States receive only the portions of the top-up tax information return that are relevant to their role within the MNE group. The Commission describes this as a need-to-know basis. A Member State hosting a constituent entity will receive the sections affecting that entity; it will not receive the full return for the entire group.

The exchange must happen as soon as practicable after the return is filed, with a hard deadline of no later than three months after the reporting fiscal year's filing deadline. A more generous six-month window applies for the first reporting year only.

With Third Countries

For non-EU jurisdictions, DAC9 does not create automatic exchange rights. Member States will need to rely on existing international agreements or negotiate new bilateral or multilateral arrangements with the relevant third countries. Groups with significant operations outside the EU should not assume that information flowing to third-country tax authorities will happen under the DAC9 framework; it will depend on whatever treaty or agreement the relevant Member State has in place. The Switzerland-Croatia DTA amendment implementing OECD minimum standards illustrates how those treaty-level adjustments are being made in practice.

Deadlines That Matter

Transposition and First Exchange

Once adopted, DAC9 requires Member States to transpose the Directive into national law by 31 December 2025. The first exchange of information must occur no later than six months after the first top-up tax information return is filed.

For calendar-year taxpayers, the first filing deadline falls on 30 June 2026. That puts the first exchange deadline at 31 December 2026 at the latest. Member States that elected deferred application of the Income Inclusion Rule (IIR) or the Undertaxed Profits Rule (UTPR) are subject to exceptions, so the precise exchange timeline will vary by jurisdiction.

Key Dates at a Glance

For context on how one Member State's IIR implementation has already been assessed, see our earlier coverage of Cyprus's qualified IIR status confirmed by DG TAXUD.

The Commissioner-Designate Hearings: What They Signal

Hoekstra on Pillar Two and Digital Taxation

Alongside the DAC9 proposal, the European Parliament published written questions ahead of the hearing of Wopke Hoekstra, Commissioner-designate for Climate, Net-Zero and Clean Growth, who under the new Commission structure also holds responsibility for taxation. His written responses, published on 23 October 2024 ahead of a hearing scheduled for 7 November 2024, give a clear read on the policy direction for the coming mandate.

On Pillar Two, Hoekstra acknowledged that roughly 90 percent of in-scope multinational enterprises were expected to be subject to the minimum tax by 2025, based on jurisdictions that had implemented or announced implementation. He did not regard that figure as sufficient to protect the system's integrity. His stated priority is ensuring that the UTPR captures taxpayers in non-implementing jurisdictions from 2025 onward, and that Member States use their assessment and enforcement powers to prevent circumvention through inaccurate or fraudulent reporting.

On digital taxation, Hoekstra indicated continued commitment to a multilateral solution under Pillar One, noting that while the OECD Multilateral Convention is ready, agreement on Amount B, which concerns the simplification of certain transfer pricing rules, remains pending. He also signalled a broader evaluation of existing EU direct tax directives, including ATAD and DAC, to identify inconsistencies and outdated provisions.

Dombrovskis on Wealth Taxes and Growth

Valdis Dombrovskis, Commissioner-designate for Economy and Productivity, also published written responses ahead of his own 7 November 2024 hearing. Although taxation sits primarily with Hoekstra's portfolio, Dombrovskis confirmed an intention to coordinate closely on tax policy recommendations that support growth and competitiveness. He indicated support for global discussions on wealth taxation in forums such as the OECD, G20, and United Nations, and plans to commission a study on wealth-related taxes in the EU to underpin that debate.

What Advisers and CFOs Should Do Now

Mapping Notification Obligations

The central filing option is helpful, but the local notification requirement means groups cannot simply delegate everything to the UPE's jurisdiction. Every EU constituent entity needs a clear process for notifying its local tax administration of the filing entity's identity and location. That process should be documented and tested before the first filing deadline.

Assessing Data Readiness

The GIR template is data-intensive. Groups that have not yet mapped their Pillar Two data flows, particularly those with cross-border financing arrangements, hybrid instruments, or digital asset holdings, face the greatest risk of late or inaccurate filing. The dissemination model means errors in the return will be visible to multiple tax authorities simultaneously. Accounting firms advising these groups should treat data quality as the primary risk, not the legal analysis. The right digital asset accounting software and crypto bookkeeping software infrastructure matters here: groups with tokenised assets or on-chain treasury positions need to ensure those balances feed correctly into the GIR data model.

Monitoring Third-Country Exchange Agreements

Groups with significant non-EU operations should track which bilateral or multilateral agreements their relevant Member States have in place. Where gaps exist, there may be asymmetric information flows: EU authorities will receive GIR data about the group's EU activities, while non-EU jurisdictions may not receive reciprocal data on schedule. That asymmetry can create audit risk in both directions.

Source: KPMG EU Tax Centre, E-News 202

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