ITI · Trade and business associations · IE
European Commission’s Public Consultation on the Possible Recast of the Directive on Administrative Co-operation (DAC) Position Paper 10 February 2026 Ref. Ares(2026)1512039 - 10/02/2026 2 Table of Contents 1. About the Irish Tax Institute ......................................................................................... 3 2. Introduction .................................................................................................................. 4 3. DAC4 and DAC9 .......................................................................................................... 5
…and DAC9 .......................................................................................................... 5 4. DAC6 ............................................................................................................................ 6 5.1 Timeframe for reporting ................................................................................................ 7 5.2 Minimising reporting of arrangements that have a clear commercial purpose ............. 8 5.3 Main Benefit Test ......................................................................................................... 9 5.4 Hallmarks ................................................................................................................... 10 5. DAC7 .......................................................................................................................... 12
…12 6. EU Tax Identification Number .................................................................................... 13 7. Conclusion ................................................................................................................. 13 3 1. About the Irish Tax Institute The Irish Tax Institute is the leading representative and educational body for Ireland’s Chartered Tax Advisers (CTA) and is the country’s only professional body exclusively dedicated to tax. The Chartered Tax Adviser (CTA) qualification is the gold standard in tax and the international mark of excellence in tax advice. We benchmark our education programme against the very best in the world. The continued development of our syllabus, delivery model and assessment methods ensure that our CTAs have the skills and knowledge they need to meet the ever-changing needs of their workplaces.
…ensure that our CTAs have the skills and knowledge they need to meet the ever-changing needs of their workplaces. Our membership of over 6,000 is part of the international CTA network which has more than 33,000 members. It includes the Chartered Institute of Taxation UK, The Tax Institute (Australia), the Taxation Institute of Hong Kong and the South African Institute of Taxation. The Institute is also a member of CFE Tax Advisers Europe (CFE), the European umbrella body for tax professionals. Our members provide tax services and business expertise to thousands of Irish owned and multinational businesses as well as to individuals in Ireland and internationally. Many also hold senior roles in professional service firms, global companies, Government, Revenue, state bodies and in the European Commission.
…in professional service firms, global companies, Government, Revenue, state bodies and in the European Commission. The Institute is, first and foremost, an educational body but since its foundation in 1967, it has played an active role in the development of tax administration and tax policy in Ireland. We are deeply committed to playing our part in building an efficient and innovative tax system that serves a successful economy and a fair society. We are also committed to the future of the tax profession, our members, and our role in serving the best interests of Ireland’s taxpayers in a new international world order. Irish Tax Institute - Leading through tax education 4 2.
…of Ireland’s taxpayers in a new international world order. Irish Tax Institute - Leading through tax education 4 2. Introduction We welcome the opportunity to contribute to the European Commission’s evaluation of the possible recast of Council Directive 2011/16/EU on administrative cooperation in the field of taxation (Recast of the DAC). The public consultation notes that while the DAC has been subject to several amendments over time there is no current consolidated legal text of the Directive. The Commission states it is necessary to bring together, in one single legal text, the DAC and its eight legislative amendments to simplify readability and clarity for all relevant stakeholders.
…text, the DAC and its eight legislative amendments to simplify readability and clarity for all relevant stakeholders. Many of the issues the Institute raised in response to the Commission’s Call for Evidence as part of its evaluation of the DAC in 2024 remain relevant when considering the proposed Recast of the DAC.1 In line with the Commission Work Programme 20262 and its work towards simplification, we firmly believe that an important focus of the Commission’s evaluation of the possible Recast of the DAC should be to streamline the reporting requirements to the greatest extent possible to help ease the administrative burden and cost imposed on businesses. The use of the information collected by tax authorities under the DAC must be carefully considered to evaluate the proportionality of the administrative burden and costs for business which compliance with the DAC entails.
…evaluate the proportionality of the administrative burden and costs for business which compliance with the DAC entails. A key focus of the Commission’s evaluation should be ensuring the most efficient use of the information which is already collected from business rather than introducing new reporting requirements. As each DAC has distinct objectives, it is critical that each element is considered separately and that any proposed changes are evidence based. The Institute would caution that in making changes to the DAC, it is essential to ensure that EU reporting requirements continue to mirror the reporting requirements under equivalent OECD initiatives. 1 https://taxinstitute.ie/wp-content/uploads/2024/07/2024-07-19-ITI-Position-Paper-on-DAC.pdf 2 https://commission.europa.eu/strategy-and-policy/strategy-documents/commission-work- programme/commission-work-programme-2026_en 5 3.
…3. DAC4 and DAC9 The consultation questionnaire notes that there are currently two different reporting schemas under DAC4 and DAC9 with numerous overlapping fields. It asks if respondents would be in favour of merging the two reporting schemas to prevent possible overlaps and double reporting. Before considering any changes to DAC4 and DAC9, it is important that a full assessment is carried out to clearly identify any areas of overlap. While in general it would be helpful to reduce the number of notifications required by taxpayers, the different deadlines for reporting under DAC4 and DAC9 and the fact that in many cases, the reporting under each DAC is carried out by separate advisers must be considered.
…and the fact that in many cases, the reporting under each DAC is carried out by separate advisers must be considered. In addition, at this stage, taxpayers and their advisers are familiar with the DAC4 reporting schema and many are currently working to complete reporting under DAC9 by the first reporting deadline of 30 June 2026. Taxpayers have already incurred significant costs to implement the necessary IT systems and processes and ensure that their staff are appropriately trained to comply with their obligations under DAC9. While merging the DAC4 and DAC9 reporting schemas may have had some benefits if it had been completed before now, the merit of merging the schemas at this juncture would need to be carefully considered.
…had been completed before now, the merit of merging the schemas at this juncture would need to be carefully considered. Overall, we believe it would be preferable to align the reporting schema under DAC4 and DAC9 where possible rather than merging the reporting requirements into one notification. Reporting by EU taxpayers under DAC4 and DAC9 mirrors the reporting requirements which apply globally under the OECD’s Country-by-Country Reporting (CBCR) and the Pillar Two GloBE Information Return (GIR). In making any changes to the schemas under DAC4 and DAC9, it would be important to ensure that the information to be reported by EU taxpayers would continue to mirror the OECD reporting requirements. The consultation questionnaire notes that currently DAC4 requires annual reporting of the names of the entities which form part of the MNE Group.
…notes that currently DAC4 requires annual reporting of the names of the entities which form part of the MNE Group. The document asks if respondents would be in favour of removing this obligation and instead, require notification of changes in the group only. Members have raised concerns that it could be difficult and time-consuming to decipher the changes to details previously reported that 6 would need to be notified, instead of annually reporting the current details of the MNE group. Indeed, such an exercise could result in creating additional costs rather than reducing the administrative burden for taxpayers. 4. DAC6 DAC6 provides for the disclosure and the automatic exchange of information relating to potentially harmful cross border tax arrangements. Compliance with the reporting requirements under DAC6 is a significant administrative burden for taxpayers and their advisers.
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…1 European Commission’s Public Consultation on the Evaluation of the Anti-Tax Avoidance Directive (ATAD) Position Paper 11 September 2024 Ref. Ares(2024)6445634 - 11/09/2024 2 1. About the Irish Tax Institute The Irish Tax Institute is the leading representative and educational body for Ireland’s Chartered Tax Advisers (CTA) and is the country’s only professional body exclusively dedicated to tax. The Chartered Tax Adviser (CTA) qualification is the gold standard in tax and the international mark of excellence in tax advice. We benchmark our education programme against the very best in the world. The continued development of our syllabus, delivery model and assessment methods ensure that our CTAs have the skills and knowledge they need to meet the ever-changing needs of their workplaces.
…ensure that our CTAs have the skills and knowledge they need to meet the ever-changing needs of their workplaces. Our membership of over 6,000 is part of the international CTA network which has more than 33,000 members. It includes the Chartered Institute of Taxation UK, The Tax Institute (Australia), the Taxation Institute of Hong Kong and the South African Institute of Taxation. The Institute is also a member of CFE Tax Advisers Europe (CFE), the European umbrella body for tax professionals. Our members provide tax services and business expertise to thousands of Irish owned and multinational businesses as well as to individuals in Ireland and internationally. Many also hold senior roles in professional service firms, global companies, Government, Revenue, state bodies and in the European Commission.
…in professional service firms, global companies, Government, Revenue, state bodies and in the European Commission. The Institute is, first and foremost, an educational body but since its foundation in 1967, it has played an active role in the development of tax administration and tax policy in Ireland. We are deeply committed to playing our part in building an efficient and innovative tax system that serves a successful economy and a fair society. We are also committed to the future of the tax profession, our members, and our role in serving the best interests of Ireland’s taxpayers in a new international world order. Irish Tax Institute - Leading through tax education 3 2.
…of Ireland’s taxpayers in a new international world order. Irish Tax Institute - Leading through tax education 3 2. Introduction We welcome the opportunity to engage with the European Commission on its evaluation of Council Directive (EU) 2016/1164 of 12 July 2016 as amended by Council Directive (EU) 2017/952 of 29 May 2017 (known as the Anti-Tax Avoidance Directive or ATAD). Article 10 of the Directive states that the Commission shall evaluate the implementation of ATAD, in particular the impact of Article 4 (the Interest Limitation Rule (ILR)), and report back to the Council of the European Union. We note that the Commission’s evaluation will focus on three broad themes: • The functioning of ATAD, in the form of a qualitative and quantitative assessment of the effectiveness of ATAD’s measures as a minimum standard in addressing aggressive tax planning.
…of the effectiveness of ATAD’s measures as a minimum standard in addressing aggressive tax planning. • Future proofing the ATAD measures, in particular their fitness for purpose and continued relevance when considering the introduction of a Council Directive EU 2022/2523 on a global minimum level of taxation of 14 December 2022 (the EU Minimum Tax Directive). • The implementation of ATAD in the Member States and the policy choices made where the Directive allowed the legislator of the Member State to choose. In the period since ATAD was adopted by the European Council, a range of initiatives have been implemented across the EU which have a similar objective to ATAD. This has resulted in an extraordinarily complex tax environment for businesses operating in the Single Market.
…to ATAD. This has resulted in an extraordinarily complex tax environment for businesses operating in the Single Market. We welcome the Commission’s plans to declutter EU tax legislation by reducing duplicative and potentially onerous regulations and requirements in favour of more streamlined rules.1 We firmly believe that the Commission’s evaluation of ATAD should consider the continued relevance of each of the ATAD measures in the context of the wider tax legislative landscape rather than focusing on ATAD in isolation. We would urge the Commission to focus its evaluation on opportunities to simplify the tax law landscape in order to reduce the regulatory burden for business and increase the competitiveness of the Single Market.
…landscape in order to reduce the regulatory burden for business and increase the competitiveness of the Single Market. We have outlined below the feedback which we have received from our members in respect of each of the three themes identified by the Commission for its evaluation. 3. The functioning of ATAD The key objective of ATAD is to tackle aggressive tax planning in the internal market.
…3. The functioning of ATAD The key objective of ATAD is to tackle aggressive tax planning in the internal market. Since ATAD was adopted by the European Council, a range of other initiatives have been implemented across EU Member States which address a similar objective to ATAD including amendments to Council Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (known as the DAC) in particular, DAC6; 1Remarks by Benjamin Angel, Director of Direct Taxation at the European Commission’s Directorate-General for Taxation and Customs Union, at the European Tax Adviser Federation conference on 17 April 2024. 4 public Country-by-Country Reporting (CbCR); and the EU Minimum Tax Directive which implemented the Pillar Two Global Anti-Base Erosion (GloBE) Rules into EU law.
…and the EU Minimum Tax Directive which implemented the Pillar Two Global Anti-Base Erosion (GloBE) Rules into EU law. The combination of these initiatives has resulted in an overly complex tax landscape for businesses operating in the Single Market. Our members highlight there has been a lack of pro-growth measures to complement the introduction of these stringent regulatory measures. In our view, this approach does not align with the European Commission’s aim to increase the competitiveness of the Single Market by making business easier. We firmly believe that the Commission’s evaluation of ATAD should form part of an overall simplification exercise. We would urge that a key objective of the Commission’s evaluation of ATAD should be to streamline the rules by addressing areas of overlap between ATAD and other EU legislation such as the Pillar Two GloBE Rules.
…the rules by addressing areas of overlap between ATAD and other EU legislation such as the Pillar Two GloBE Rules. It is also imperative that detailed consideration is given to the how the ATAD measures will interact with future initiatives that may be adopted, such as the proposed Directive on Rules to Prevent the Misuse of Shell Entities for Tax Purposes (Unshell) and the proposal for a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT). In evaluating any evidence to demonstrate whether the ATAD objectives have been achieved, it would be essential to consider the cost associated with such aims. For example, has the complex regulatory environment of the Single Market following the implementation of the ATAD measures across EU Member States negatively impacted on the investment decisions of companies? 4.
…of the ATAD measures across EU Member States negatively impacted on the investment decisions of companies? 4. Future proofing the ATAD measures in particular their fitness for purpose and continued relevance in light of the EU Minimum Tax Directive ATAD Interest Limitation Rule (ILR) The ATAD ILR is intended to discourage companies in engaging in base erosion profit shifting through excessive interest payments by limiting the deductibility of taxpayers' exceeding borrowing costs. ATAD ILR limits the exceeding borrowing costs that a taxpayer may deduct in a tax period to 30% of EBITDA. The interest rate environment has changed significantly since ATAD was adopted with interest rates increasing as governments have adjusted their monetary policies to address inflation. This means that taxpayers are now facing higher interest costs on borrowings.
…monetary policies to address inflation. This means that taxpayers are now facing higher interest costs on borrowings. However, the 30% limit under the ILR has not changed despite the significant increase in interest rates. In our view, consideration should be given to whether it is appropriate to benchmark the cap on exceeding borrowing costs under the ILR to reflect changes in interest rates. ATAD General Anti-Abuse Rule (GAAR) The overarching objective of the ATAD GAAR is to tackle abusive tax practices. In addition to the GAAR, general anti-avoidance provisions are included in other EU 5 Directives such as the Parent Subsidiary Directive2 and the Interest and Royalties Directive3 which also aim to tackle abusive tax practices. The necessity for such duplicate anti-avoidance provisions should be reviewed in light of the implementation of the ATAD GAAR across EU Member States.
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