European Banking Federation

European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 www.ebf.eu EBF contribution to the Commission’s call for evidence on the DAC Brussels, 10 February 2026 Banks play a central role in the effective implementation of tax transparency rules under the Automatic Exchange of Information (AEOI) framework. By carrying out due diligence and reporting obligations, they help ensure transparency on their clients’ financial accounts and support tax authorities in combating tax evasion.

…help ensure transparency on their clients’ financial accounts and support tax authorities in combating tax evasion. Together, the Foreign Account Tax Compliance Act (FATCA), the OECD’s Common Reporting Standard (CRS), the OECD’s Crypto-Asset Reporting Framework (CARF) and the EU Directive on Administrative Cooperation (DAC) form the backbone of global tax reporting and information exchange. The DAC has evolved into the EU’s central framework for administrative cooperation in direct taxation. Since its adoption in 2011, it has been amended repeatedly to address emerging risks and international developments, resulting in nine distinct pillars covering a wide range of reporting and exchange mechanisms.

…developments, resulting in nine distinct pillars covering a wide range of reporting and exchange mechanisms. Within this complex framework of domestic, EU and international rules, EU financial institutions are required to report information on income payments (under CRS/DAC2), on cross-border arrangements (under DAC6) and on transactions involving crypto-assets (under CARF/DAC8). While this evolution has undeniably strengthened tax transparency and cooperation between tax authorities, it has also resulted in increasing complexity, fragmentation, and overlapping compliance requirements. As a consequence, the framework has become progressively more difficult to navigate, both for competent authorities and for reporting entities.

…has become progressively more difficult to navigate, both for competent authorities and for reporting entities. The Commission’s second evaluation report, published on 19 November 2025, confirms that the DAC has delivered significant benefits in combating tax fraud, evasion, and Ref. Ares(2026)1491992 - 10/02/2026 2 www.ebf.eu avoidance, including an estimated EUR 6.8 billion in annual additional tax revenues. At the same time, the evaluation highlights clear areas for improvement, notably the need to simplify and streamline reporting obligations, particularly under DAC6, and to address fragmentation in national implementation. From an industry perspective, these findings require important qualification. While the benefits of the DAC framework accrue primarily to public finances, the costs of compliance are overwhelmingly borne by the private sector.

…framework accrue primarily to public finances, the costs of compliance are overwhelmingly borne by the private sector. More than 90% of recurring administrative costs associated with the DAC fall on private entities, resulting in growing compliance burdens that risk undermining both operational efficiency and competitiveness. The European Banking Federation (EBF) supports the European Commission’s intention to simplify and consolidate the Directive on Administrative Cooperation in the field of taxation (DAC). The planned recast, consolidating DAC1 through DAC9 into a single legislative text, represents an important opportunity to take stock of the effectiveness of the existing framework on information exchange, address its shortcomings, and improve its overall functioning.

…of the existing framework on information exchange, address its shortcomings, and improve its overall functioning. While the sector remains fully committed to the objectives of tax transparency and fairness, it advocates for a more pragmatic, proportionate, and streamlined regulatory framework. After a decade of implementation, it is an appropriate time to assess the Automatic Exchange of Information system. The EBF strongly supports the overarching objective of the recast to “clarify, simplify and improve the functioning of EU rules on administrative cooperation in the field of taxation, thereby reducing the administrative burden for relevant stakeholders and supporting the growth and competitiveness of the EU.” These objectives are essential to ensure that the DAC framework remains effective, proportionate, and sustainable over the long term.

…are essential to ensure that the DAC framework remains effective, proportionate, and sustainable over the long term. Against this background, the DAC recast must align fully with the EU’s broader simplification and competitiveness agenda. Ensuring fair taxation and effective cooperation should not come at the expense of a well-functioning internal market. 3 www.ebf.eu Competitiveness In line with the EU’s renewed focus on competitiveness, it is essential that the DAC recast fully takes into account the impact of disproportionate reporting obligations on the EU financial sector, as these risk producing unintended consequences, including increased operational complexity, higher compliance costs, and a reduced capacity for EU institutions to compete effectively at global level.

…complexity, higher compliance costs, and a reduced capacity for EU institutions to compete effectively at global level. Ensuring fair taxation and tax transparency should therefore go hand in hand with preserving a well-functioning and competitive internal market. Moreover, reducing fragmentation in national implementation is essential to ensure a genuine level playing field. Divergent interpretations, inconsistent application, and gold- plating by Member States significantly impair the framework’s ability to deliver its intended outcomes. At the same time, they increase the cost of doing business in Europe, hinder cross-border activity, and ultimately weaken the Single Market. Greater proportionality and streamlining of the current rules are therefore critical to the effectiveness and long-term sustainability of the DAC framework.

…of the current rules are therefore critical to the effectiveness and long-term sustainability of the DAC framework. Simplification In line with the EU’s simplification agenda, the DAC recast must address the inefficient and duplicative reporting obligations that do not contribute effectively to the objectives of tax transparency or administrative cooperation. The recast should be a targeted reform, not a remake. Consolidation should focus on ensuring that rules which impose significant compliance costs while generating limited or inconsistent use of the reported data are reassessed, streamlined, or removed altogether. It should not be used as an opportunity to expand the scope of existing rules or to introduce new reporting obligations indirectly. Instead, it should ensure that obligations are well-calibrated, proportionate, clearly defined, effectively coordinated and efficient.

…ensure that obligations are well-calibrated, proportionate, clearly defined, effectively coordinated and efficient. o Well-calibrated: Banks can only provide tax authorities with factual indicators based on the information readily available to them in digital form. They do not determine taxpayers’ liabilities, which can only be established by the competent authorities of the residence country under domestic law, after reviewing reported data and verifying tax returns. If tax authorities require more detailed information, they must rely on instruments beyond CRS/DAC2 reporting. Banks are committed to transparency and to providing the available information to help combat tax avoidance and tax evasion. However, they should not be expected to carry out subjective assessments or 4 www.ebf.eu investigations that fall solely within the remit of tax administrations.

…out subjective assessments or 4 www.ebf.eu investigations that fall solely within the remit of tax administrations. It is also important to recall that holding a foreign bank account is often a practical necessity within the European context and should not, in itself, be treated as evidence of tax fraud or evasion. Excessive or disproportionate requirements with additional reporting duties imposed on financial institutions would increase their compliance costs, reduce efficiency, risk undermining the free provision of financial services and the free movement of capital within the EU, and may conflict with the General Data Protection Regulation (GDPR).

…and the free movement of capital within the EU, and may conflict with the General Data Protection Regulation (GDPR). A coherent, harmonised framework is therefore needed - one that ensures legal certainty, fosters transparency, and supports genuine international tax cooperation, without imposing responsibilities on banks that are the prerogative of tax authorities. o Clearly defined: It is essential to uphold the fundamental principle of legal certainty in tax reporting by identifying common practices, providing clear guidance on definitions, and establishing well-defined responsibilities and liabilities for financial intermediaries. o Effectively coordinated: Consistency of rules across tax reporting regimes is critical, along with the need for countries to refrain from introducing extraterritorial tax legislation, which can lead to conflicts of laws.

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European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 www.ebf.eu EBF_043784 20 December 2020 EBF RECOMMENDATIONS On the inception impact assessment for a Proposal for a Council Directive amending Directive 2011/16/EU as regards measures to strengthen existing rules and expand the exchange of information framework in the field of taxation to include crypto-assets and e-money

…and expand the exchange of information framework in the field of taxation to include crypto-assets and e-money 1. The European Banking Federation (EBF) has welcomed addressing the opportunities, challenges and risks by crypto assets in a holistic approach, aiming to support blockchain technology’s potential throughout Europe. In our paper EU digital finance package is major step forward we noted the importance of balancing innovation and protection of consumers and investors. Where crypto assets qualify under existing regulation, protection is offered. But with emerging, non-covered crypto asset types – potentially having significant impact on consumer protection and monetary policy– the regulatory framework should answer appropriately. We believe that based on the principle ‘same services, same risks, same rules’, risks need to be prevented by addressing issues such as transparency and…

…need to be prevented by addressing issues such as transparency and supervision, avoiding fragmentation across the EU.1 2. The EBF welcomes the opportunity to provide a reaction to the inception impact assessment. We recognise the increasing importance of crypto-assets and e-money in the digitalisation of the European economy. In ensuring fair, efficient and sustainable taxation by the member states, the specific and new challenges of this new asset class need to be addressed. We recognise that significant work has been done in this field by the OECD2 specifically on tax matters and FATF3 specifically on AML/CFT. 3.

…work has been done in this field by the OECD2 specifically on tax matters and FATF3 specifically on AML/CFT. 3. We also note that in the context of AML/TF the 5th AML Directive already refers to crypto-assets by defining: - “providers engaged in exchange services between virtual currencies and fiat currencies”; - “custodian wallet providers”; - “virtual currencies”; and - “custodian wallet provider”. Additional AML requirements are expected to follow from future proposals to overhaul the EU AML framework in 2021. We believe that this overhaul should be based on the revised framework that is being developed and that is based on the extensive and important work 1 EU digital finance package is major step forward, EBF, Brussels September 24, 2020. 2 Taxing Virtual Currencies: An Overview of Tax Treatments and Emerging Tax Policy Issues OECD (2020).

…24, 2020. 2 Taxing Virtual Currencies: An Overview of Tax Treatments and Emerging Tax Policy Issues OECD (2020). 3 FATF REPORT, Virtual Assets, Red Flag Indicators of Money Laundering and Terrorist Financing (2020). Ref. Ares(2020)7813039 - 21/12/2020 2 www.ebf.eu that has been done by the Commission in the context of its Digital Finance Strategy. Most notably we refer to the framework of definitions that is proposed in the Regulation on Markets in Crypto-assets (“MICA”)4 and that recognises the different types of crypto- assets: Crypto-assets that qualify as financial instruments should be regulated as such because they pose the same risks of a financial instrument. However, crypto-assets that have different functions (for example utility tokens or payment tokens), do not pose the same risks.

…crypto-assets that have different functions (for example utility tokens or payment tokens), do not pose the same risks. Regulating them as financial instruments would therefore be disproportionate and would hamper innovation.

…same risks. Regulating them as financial instruments would therefore be disproportionate and would hamper innovation. 4. The proposed MICA regulation also has a more extensive framework of definitions including definitions for ‘distributed ledger technology’, ‘crypto-asset’, ‘asset-referenced token’, ‘electronic money token’, ‘utility token’, ‘issuer of crypto-assets’, ‘crypto-asset service provider’ and ‘crypto-asset service’. We believe that the MICA definitional framework should be used as the starting point for the extension of DAC 2 to crypto- assets. It should be mapped to the DAC 2 definitional framework. Using a uniform definitional framework will be a key factor in a successful application of DAC 2 reporting on crypto-assets. Banking groups are developing electronic currency solutions operating in places and for short periods of time (during an artistic festival and in its…

…a financial account or as “classic” money, and it would be difficult to ask for a self-certification in this context. 5. In addressing the extension of DAC 2 to crypto-assets we believe that the extension should be based on the general concept of ‘same services, same risks, same rules’. This could for example mean that where the custody and administration of crypto-assets is very similar to the concept of holding financial assets for the account of others, the reporting obligation of such a crypto-asset service provider should be the same as that of a Custodial Institution under DAC 2. We would like to emphasize that traditional financial institutions have made very significant efforts and investments in order to put in place the systems and procedures required by DAC 2 and to comply with the related tax reporting requirements. New tax reporting requirements should not be imposed on…

…not be imposed on banks but rather extended to the other economic operators providing similar or equivalent services. 6. It will be necessary to clarify how the DAC 2 provision on the reporting of gross proceeds from the sale or redemption of Financial Assets with respect to which the Reporting Financial Institution acted as a custodian, broker, nominee, or otherwise as an agent for the Account Holder5 would work in the context of the reporting by a crypto-asset service provider that converts crypto-assets in fiat currency or other crypto-assets. 7. The reporting framework should – like DAC 2 - be based on readily available and objective data in the systems of the reporting entity. 4 Brussels, 24.9.2020, COM(2020) 593 final 2020/0265 (COD). 5 See Section I.A.5(b) of DAC2. 3 www.ebf.eu

…entity. 4 Brussels, 24.9.2020, COM(2020) 593 final 2020/0265 (COD). 5 See Section I.A.5(b) of DAC2. 3 www.ebf.eu 8. The DAC 2 reporting framework including its definitions are strongly interconnected with the OECD Common Reporting Standard and the FATCA framework designed by the United States. The benefits of this global framework are that it combats tax evasion by taxpayers seeking to hide their assets in offshore accounts and at the same time ensures a global level playing field. Consequently, any extension of the DAC 2 reporting to crypto-assets should be considered within the same global approach.

…any extension of the DAC 2 reporting to crypto-assets should be considered within the same global approach. 9. In certain cases the valuation of crypto-assets in terms of fiat currency may be difficult or very volatile. As the taxation of income or gain from crypto-assets is a matter of the national tax law of each member state, we believe that the regulation of how to value crypto-assets for domestic tax purposes should be better left to the national tax authority. The reporting of crypto-assets under DAC 2 should therefore be based on an agreed upon simple and objective methodology that would eliminate any valuation judgements or complex valuation methodologies.6

…and objective methodology that would eliminate any valuation judgements or complex valuation methodologies.6 10. It would need to be addressed whether a significant percentage of crypto-assets can be held in so-called cold wallets without the involvement of a crypto-asset service provider that is engaged in “the safekeeping or controlling, on behalf of third parties, crypto-assets or the means of access to such crypto-assets, where applicable in the form of private cryptographic keys”. In that event a major part of the market in crypto-assets could be outside the scope of the DAC 2 reporting framework and the reporting framework would then be incomplete. The reporting on such assets may be brought under a DAC 2 framework based on the reporting of the conversion of such assets into fiat currency by a crypto asset service provider.

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European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 1 www.ebf.eu EBF_036005 4 March 2019 Evaluation of Administrative Cooperation in Direct Taxation The European Banking Federation (EBF) and its members have a long-standing commitment to fostering a sound and consistent implementation of international standards in the field of tax transparency. Financial institutions across Europe have made a significant investment in implementing such standards, sometimes within a very short timeframe. We believe that this investment has been instrumental in ensuring a high quality of reporting to competent authorities.

We believe that this investment has been instrumental in ensuring a high quality of reporting to competent authorities. As the voice of the European banking sector, uniting 32 national banking associations in Europe that together represent some 3,500 banks – large and small, wholesale and retail, local and international – we find it difficult to provide conclusive answers that would truly and fairly reflect the point of view of all members to the questions set out in the questionnaire. Therefore, we set out below our input in the form of general comments aimed at reflecting the view and assessment of the European banking sector as regards DAC 2 and DAC 6. DAC 2 (1) Implementing DAC 2 – enormous efforts and high costs for Financial Institutions The implementation of DAC 2 generally required Financial Institutions to set up extensive implementation projects.

…implementation of DAC 2 generally required Financial Institutions to set up extensive implementation projects. Financial Institutions and their legal, operations, business and IT-experts had to comprehensively analyze the provisions of DAC 2 and work out the necessary implementation measures considering the domestic legal framework as well as the Financial Institution’s customer structure, operational processes and IT environment. In addition to significant changes to current IT systems and the development of new IT Ref. Ares(2019)6268015 - 10/10/2019 2 www.ebf.eu solutions (e.g. reporting channel), modifications to internal procedures (eg customer onboarding, customer documentation) as well as the training of staff were necessary to be compliant and able to report the required information in time.

…as well as the training of staff were necessary to be compliant and able to report the required information in time. DAC 2 exemplified the complexities of today’s banking business, the relationship between customers and banks as well as their IT-systems. Financial Institutions across Europe and even in one Member State are structured and organized quite differently. While implementing DAC 2, Financial Institutions were often forced to find individual solutions for their specific needs. The enormous efforts undertaken by banks to implement DAC 2 also illustrate the difficulties and challenges Financial Institutions are facing when they are required to provide personal or financial information on customers and their transactions in a standardized format to tax authorities.

…personal or financial information on customers and their transactions in a standardized format to tax authorities. What has further multiplied the complexity of the implementation of DAC 2, bearing in mind Financial institutions often operate across multiple jurisdictions, is the inconsistent interpretation or application of various parts of the Directive across EU jurisdictions. These differences range from different reporting schemas to the adoption of slightly different interpretations of certain CRS entity classifications. While these differences may seem minor when compared to the totality of the DAC 2 regime, their impact has been significant because they affect the end-to-end implementation of DAC 2. Their impact can be felt from client on-boarding, the determination of who is reportable and the filing of reports.

…2. Their impact can be felt from client on-boarding, the determination of who is reportable and the filing of reports. Inconsistent application of the rules not only leads to increased risk for Financial Institutions, but also dilutes the usefulness of the data received by tax authorities. While we are not able to provide a global estimate of the costs incurred by the European banking sector for the implementation of DAC 2, we note, based on the statistics contained in the latest Commission’s report on AEOI1, that such costs are in aggregate much higher than the costs incurred by competent authorities within the EU. Considering that the report refers only to cost estimates for Financial Institutions in Austria, France, Germany, Luxembourg and UK (aggregated implementation cost around EUR 340 Mio.

Institutions in Austria, France, Germany, Luxembourg and UK (aggregated implementation cost around EUR 340 Mio. and annual cost around EUR 120 Mio.), the total cost of DAC 2 for Financial Institutions in Europe could already have exceeded EUR 1 Billion. (2) Responsible and appropriate use of reported DAC 2-data Member States should make a sensible use of the information exchanged under DAC 2, which only provides indications in relation to the existence of taxable assets and income abroad. We have witnessed a series of misinterpretations on the part of tax authorities in relation to the information exchanged under the EU Savings Directive.

…on the part of tax authorities in relation to the information exchanged under the EU Savings Directive. Gross sales proceeds reported by paying agents were for instance recurrently equated to a net interest income by certain tax offices, while amounts reported in foreign currencies are included without conversion into EUR in the taxable basis of beneficiaries. As a result of the foregoing, certain beneficiaries were facing unjustified challenges and upward adjustments by their local tax office. We are concerned that these issues will be replicated and possibly exacerbated under DAC 2 given its wider scope.

We are concerned that these issues will be replicated and possibly exacerbated under DAC 2 given its wider scope. The raw data exchanged do not constitute a tax certificate and can by no means serve as sole basis for the purpose of calculating the taxable income of beneficiaries, not least because the relevant items of income are determined in accordance with the tax laws of the country where the paying agent/reporting financial institution is established. Local tax 1 https://ec.europa.eu/taxation_customs/sites/taxation/files/report-automatic-exchanges-taxation-dac-844_en.pdf 3 www.ebf.eu authorities across the EU should be able to understand correctly the goals of DAC2 and the finality (and limits) of the information so exchanged. This may sometimes require an appropriate training of tax officers.

(and limits) of the information so exchanged. This may sometimes require an appropriate training of tax officers. We note that the resulting administrative burden for individuals holding a bank account in another Member State may eventually lead to the creation of (de facto) barriers to the free movement of capital and, possibly, the free provision of financial services across the EU. (3) Additional AEOI information for taxpayers from Tax Authorities needed Tax authorities should disseminate additional information regarding the purpose of AEOI and related documentary requirements for account holders. The amount of paperwork required in order to ascertain account holders' status is not always well understood by clients. This could be improved by additional communication on the part of authorities on the legitimate objectives of DAC 2 and related requirements for bank customers.

…on the part of authorities on the legitimate objectives of DAC 2 and related requirements for bank customers. The education of the public about CRS, its aims and esoteric definitions should be a priority for governments – the concepts and definitions introduced by AEOI are new and not always well understood by account holders. In addition, we would like to encourage tax authorities to provide (e.g. on their homepage) clear and easily accessible information regarding the principle of “tax residency”. This would allow customers to better understand and assess their own residency status and would facilitate the process of obtaining a self-certification. (4) Tax Identification Number – OECD AEOI portal requires continuous updates The obtention of a valid TIN remains a critical element in the onboarding process.

…portal requires continuous updates The obtention of a valid TIN remains a critical element in the onboarding process. Members report that information on TINs provided by certain jurisdictions on the OECD AEOI portal are not correct / no longer current. This is a source of complication for financial institutions. Participating jurisdictions should ensure to provide timely and accurate information on TINs. (5) Consistent application and harmonized implementation rules Any further updates to the current reporting rules should be thoroughly thought and impacts measured before any changes are adopted at national level and/or European level because it places an ongoing burden on any stakeholder and to ongoing discussions with clients who seek to understand the rules and implementation discrepancies with other jurisdictions are constantly challenged (for instance “Excluded Accounts”).

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European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 1 www.ebf.eu 8 February 2024 EBF_046379 European Banking Federation (EBF) response to the European Commission Call for Evidence on the Report on the General Data Protection Regulation (Art. 97) General comments This response complements the questionnaire response provided to the European Commission Multi-Stakeholder Expert Group of which the European Banking Federation is a member of. The introduction of the GDPR resulted in a significant increase in the attention for and the application of data protection rules.

…of the GDPR resulted in a significant increase in the attention for and the application of data protection rules. The banking sector has a long tradition of compliance and affinity with customer data protection since even before the entry into force of the Directive 95/46/EC. Adapting to the updated requirements introduced by the GDPR has taken place through internal compliance programs. This enduring commitment underscores the industry's dedication to maintaining the highest standards of data security and privacy for its clients. The principle and risk-based approach of the Regulation remains one of its main benefits and should remain at the core of the GDPR. This is important for banks in light of the many sectoral regulations they have to abide by and for their ongoing digital transformation. However, challenges remain, and we would like to highlight the following general points:

…digital transformation. However, challenges remain, and we would like to highlight the following general points: 1. Ensuring the uniform application and implementation of the GDPR across member states The risk of fragmentation due to different interpretations of the GDPR by Data Protection Authorities (DPAs) remains a challenge. A uniform application is crucial to avoid operational burdens and legal uncertainties and to foster cross-border services and contribute to a unified market for retail financial services. 2. Practical consideration of the interplay between the GDPR and other regulations, including at the sectoral level A recurring challenge for the financial sector is the interaction of the GDPR with sectoral requirements. Examples include the interplay with the anti-money laundering (AML) obligations and with the revised Payment Services Directive (PSD2).

…the interplay with the anti-money laundering (AML) obligations and with the revised Payment Services Directive (PSD2). Positive steps have been taken in the updated frameworks for AML and payments (currently under discussion by co-legislators) in areas such as information sharing. An important area where interplay remains to be addressed is sanctions regulations, where there are still uncertainties when it comes to data retention and, because of this, may make it difficult for banks to demonstrate compliance with regulations upon request from supervisory authorities. Ref.

…make it difficult for banks to demonstrate compliance with regulations upon request from supervisory authorities. Ref. Ares(2024)970852 - 08/02/2024 2 www.ebf.eu European Data Protection Guidelines (EDPB) guidelines may also benefit from a more sectoral-level approach, which can be overlooked when guideline are issued, for example, on the right of access, which take a very prescriptive approach and do not take into account sector specific obligations (e.g. including in the text that the scope of the right of access includes “data inferred or other data, rather than directly provided by the data subject (e.g., to assign a credit score or comply with anti-money laundering rules….” ) Sharing this type of (very sensitive) data poses serious risks to a bank.

…comply with anti-money laundering rules….” ) Sharing this type of (very sensitive) data poses serious risks to a bank. For example, certain aspects of AML compliance are under a duty of secrecy; divulging information for example on whether a transaction is suspicious or that an institution is investigating it, for a possible report to the Financial Intelligence Unit, constitutes a breach of AML legislation (tipping off prohibition). To help address this gap, we suggest: o More dedicated exchanges or outreach with DPAs allowing for sharing operational constraints and sectoral experiences. Currently experiences vary, in some cases limited contact with a bank’s DPA and difficulties in being heard on operational aspects/specifics of the sector mean that no practical recommendations are provided to banks, even when they share their practices and views.

…sector mean that no practical recommendations are provided to banks, even when they share their practices and views. o Increased collaboration between the EDPB, and sectoral authorities, for example the European Banking Authority, and organisations representing the industry to avoid conflicting interpretations and diverging rules. For instance, the final EDPB guidelines on the interplay between GDPR and the revised Payment Services Directive (PSD2) left many concerned entities, including banks, with a choice of which legislation to comply with in light of the recommendations presented in the guidance. Overall, DPAs, play a key role on awareness raising, and more initiatives, including targeting different sectors, would be highly valuable. Learnings should be drawn from the experiences of the past 5 years and shared with the general public. 3.

…valuable. Learnings should be drawn from the experiences of the past 5 years and shared with the general public. 3. Preserving the risk-based approach of the GDPR. Guidelines and recommendations published by the EDPB are non-binding yet hold great persuasive value and may contribute to reducing the margin of manoeuvre of data controllers in abiding by the principles of the GDPR. Moreover, the diminishing risk- based approach is also affecting the developments in the jurisprudence, as shown, for example, by recent CJEU case law. The GDPR created the accountability principle to allow companies to take their responsibilities and find the best way for their organisation to comply with the regulation. For banks, this includes performing DPIAs, registering their data processing, hiring a DPO and performing audits, among other actions.

…includes performing DPIAs, registering their data processing, hiring a DPO and performing audits, among other actions. However, often banks are limited by the EDPB guidelines, which are largely too prescriptive with details or rules to implement certain obligations, which undermine the accountability principle and the risk-based approach put forward by the GDPR. There is limited space to autonomously decide (e.g., EDPB Recommendations 01/2020 on measures that supplement transfer tools to ensure compliance with the EU level of protection of personal data). Indeed, the more strict and rigid guidelines are, the less margin of manoeuvre is left for data controllers in the sector to attain the same goal by using mechanisms or 3 www.ebf.eu making choices that are more appropriate for the sector and/or their organisations.

…by using mechanisms or 3 www.ebf.eu making choices that are more appropriate for the sector and/or their organisations. Given the fact that these guidelines have great influence, if one company attains the objectives of the GDPR slightly differently than how it is described in the guidelines, that company can be seen as being non-compliant, without this being the case. Specific comments In terms of specific comments, we would like to flag in particular those on the following topics: i. Information obligations, including the type and level of detail of the information to be provided (Articles 12 to 15). The right of access to data continues to be the most requested and known data subject right among clients. Detailed information on how to exercise the individual's right of access pursuant to Art. 15 GDPR is provided to customers.

…information on how to exercise the individual's right of access pursuant to Art. 15 GDPR is provided to customers. Privacy statements on the bank’s website usually have information on how to exercise their rights, including that of access, and a specific link or page that clients can visit to do so. Based on the experience of members, the great majority of access requests are made by data subjects who are involved in a dispute with their bank or are considering starting legal proceedings or other dispute resolution mechanisms against a financial entity and much less for the purpose of verifying the legitimacy of their data processing. In these cases, the normal procedural way to obtain evidence should be used to guarantee the equality and fairness of the judicial process, not the GDPR. The rules of civil procedure should be able to coexist with the right of access of clients.

…process, not the GDPR. The rules of civil procedure should be able to coexist with the right of access of clients. We understand that obtaining a copy of the data (which in some cases this could mean providing a copy of certain documents) is necessary to guarantee the effective exercise of data subjects' access rights and that the CJEU’s judgement in the Case C-307/22 indicates that data subjects can request a copy of the data for purposes not referred in to recital 63, even unrelated to data protection, but there should still be a respect for established civil procedures and an appreciation that these can be limitations, examined on a case by case basis. In order to provide certainty for clients and for banks, we would therefore recommend to explore the relationship between local rules of civil procedure at member state level and Article 15 further (e.g., to what extent may Art.

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…30 March 2023 EBF_046062 European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 1 www.ebf.eu EBF RESPONSE TO THE EUROPEAN COMMISSION CONSULTATION ON DAC8 The European Banking Federation (EBF) welcomes the opportunity to provide comments to the public consultation launched by the European Commission on the new proposal for a directive to amend the Directive on Administrative Cooperation (“DAC8”). 1. General comments We are in favour of measures to create a level playing field for all types of assets as well as for all new and emerging financial service providers.

…create a level playing field for all types of assets as well as for all new and emerging financial service providers. The EBF supports the addition of new measures applicable to Crypto-Assets, however they should not unproportionally increase the compliance burden on financial institutions (FIs). The EBF supports innovation in the emerging crypto industry and thus it is important that new rules (aligned with OECD CARF) do not inadvertently stifle innovation. We welcome the guidance provided so far by the OECD that suggests certain deployments of blockchain technology would not per se be caught within scope of Crypto-Asset reporting. As this is a developing area, we would strongly recommend the Commission consults with the industry on the various uses of blockchain and other similar technology and how this might interact with any Crypto-Asset reporting.

…various uses of blockchain and other similar technology and how this might interact with any Crypto-Asset reporting. In particular, we would note that traditional FIs should be included in these discussions as banking groups may hold regulated entities which are intermediaries in Crypto-Assets, and they may deploy blockchain technology for internal purposes. The information reported by banks under the CRS/DAC2 framework is aimed at providing the tax authorities in the home country with information about income payments made to taxpayers who are resident in that country. Banks only provide tax authorities with indicators and do not assess or prejudge the tax liability of these income payments according to the tax law applicable in the residence country.

…or prejudge the tax liability of these income payments according to the tax law applicable in the residence country. This liability can only be established by the tax authorities of the residence country after assessment, in the light of the domestic tax law, of the data reported, and after verification of the related income tax returns. Banks can only report the information that is readily available to them. Banks should not be asked to carry out further investigations that are the sole responsibility of the tax authorities. If they need more granular information, tax authorities can use other tools than CRS/DAC2 reporting. As a general information tool, the CRS/DAC2 framework works well in assisting tax authorities in closing tax gaps. We are therefore concerned that changes to the existing framework as is requested under the CRS review and DAC8 may jeopardize this.

…concerned that changes to the existing framework as is requested under the CRS review and DAC8 may jeopardize this. In particular, the alignment on AML/KYC rules should be maintained. For some of the possible new reporting requirements e.g. additional information on the role of Controlling Persons in relation to the Entity Account Holder and also on Joint Accounts, the information is not readily available or readily mapped within the metadata used by FIs. Against this background, we would strongly recommend that instead of considering any further requirements, governments focus on how to improve the usefulness of the CRS/DAC2, while recognising that additional layers of due diligence and reporting requirements may not ultimately achieve that outcome. Ref. Ares(2023)2315149 - 30/03/2023 2 www.ebf.eu It appears that the DAC8 rules go beyond what OECD has suggested for CRS and CARF.

- 30/03/2023 2 www.ebf.eu It appears that the DAC8 rules go beyond what OECD has suggested for CRS and CARF. It would be highly burdensome if the rules established for EU Member States were tougher than those that apply to other OECD countries. The EBF calls for alignment with global/OECD standards. 2. Reporting Crypto-Asset Service Providers (RCASP) 2.1. Definition of Crypto-Assets in the scope We understand that in line with the OECD CARF, Reporting Crypto-Asset Service Providers (RCASP) under DAC8 may exclude certain Crypto-Assets from the reporting obligation whenever they conclude that such Crypto-Assets cannot be used for payment or investment purposes.

…reporting obligation whenever they conclude that such Crypto-Assets cannot be used for payment or investment purposes. Under the OECD CARF, in order to properly determine whether a Crypto-Asset cannot be used for payment or investment purposes, the OECD CARF provides in its commentary’s guidance on the different steps that a Reporting CASPs may rely on: AML/KYC classification pursuant to FATF Recommendations; Crypto-Assets that represent Financial Assets or subject to financial regulation are to be considered as used for payment or investment purposes; nature of the nonfungible token (NFT) and its function in practice; and closed loop Crypto-Assets may not be considered as used for payment for investment purposes. In case of doubts as to whether a Crypto-Asset can be used for payment or investment purposes, the Crypto-Asset is to be considered a Relevant Crypto-Asset.

…can be used for payment or investment purposes, the Crypto-Asset is to be considered a Relevant Crypto-Asset. Unlike the OECD CARF, the definition of Crypto-Assets under DAC8 is built on an EU regulatory classification under MiCA which defines the scope of Crypto-Assets under regulation. In this context, it is not clear how Crypto-Asset providers under DAC8 may adequately determine whether a Crypto-Asset cannot be used for payment or investment purposes if it is not specified under MiCA or any other EU regulation. Accordingly, the concept of “investment purpose” could be implemented differently by Member States, which would jeopardise the effectiveness of DAC8 and the reference to a uniform EU regulatory framework. Additional guidance is needed to limit potential loopholes and divergent implementation. 2.2.

EU regulatory framework. Additional guidance is needed to limit potential loopholes and divergent implementation. 2.2. Definition of RCASP and Relevant Crypto-Assets Unlike the OECD framework, which only includes in the scope of reporting Crypto-Assets Service Providers those offering Crypto-Asset exchange services, the DAC8 proposal includes those that perform a “Crypto-Asset Service” as defined under MiCA permitting to complete an exchange transaction. Hence, the scope of entities subject to reporting obligations will be much broader within the EU than under the CARF. A certain number of actors outside the CARF framework will fall within the scope of DAC8, such as providers of advice on Crypto-Assets and providers of storage solutions on behalf of third parties. In this context, we believe that the benefit of an EU framework is to ensure a global level playing field.

…parties. In this context, we believe that the benefit of an EU framework is to ensure a global level playing field. Consequently, any extension of the scope of reporting entities by the EU should be considered within the same global approach, taking into consideration the OECD CARF. Moreover, under the CRS, entities that solely provide storage or security services for private keys are excluded from the definition of Custodial Institution. It would be useful to align/build on the OECD CRS and expressly exclude these services from the reporting. 3 www.ebf.eu On the other hand, the scope of the CARF includes NFTs while MiCA (and therefore DAC8) chose not to include these tokens because they present low financial risk.

NFTs while MiCA (and therefore DAC8) chose not to include these tokens because they present low financial risk. In view of this observation, to facilitate understanding, legal certainty, and proper application of the provisions of these different frameworks, the definitions of DAC8 and of CARF should be fully aligned to concentrate on the more significant assets and actors. 2.3. Rules to enforce the collection and verification requirements Unlike the CARF, according to subparagraph A (2) of Section V: “Where a Crypto-Asset User does not provide the information required under Section III after two reminders following the initial request by the Reporting Crypto-Asset Service Provider, but not prior to the expiration of 60 days, the Reporting Crypto-Asset Service Providers shall prevent the Crypto-Asset User from performing Exchange Transactions”.

Reporting Crypto-Asset Service Providers shall prevent the Crypto-Asset User from performing Exchange Transactions”. This provision raises legal issues insofar as nothing is said about the lawfulness of blocking transactions and how this may be implemented. 3. Extraterritoriality DAC8 requires non-EU RCASPs providing a crypto service to EU taxpayers to register with an EU member state and meet CARF due diligence and reporting requirements of that member state. While RCASPs resident in jurisdictions that have adopted rules equivalent to DAC8 are excused from this obligation, fundamentally this creates extraterritorial due diligence and reporting obligations for entities located outside of the EU to an EU member state.

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…09 September 2024 European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 1 www.ebf.eu EBF RESPONSE TO THE 2024 EUROPEAN COMMISSION CONSULTATION ON ATAD The European Banking Federation (EBF) welcomes the opportunity to provide comments to the public consultation launched by the European Commission on the Anti Tax Avoidance Directive (“ATAD”). 1. General comments Over the past decade, the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS) has sparked transformative, once-in-a-generation changes to the global tax framework. The Anti-Tax Avoidance Directive (ATAD or ATAD1) was the first step taken by the EU in answer to the global BEPS initiative.

Avoidance Directive (ATAD or ATAD1) was the first step taken by the EU in answer to the global BEPS initiative. By establishing minimum standard rules to ensure that profits are taxed where economic activities generating them take place and where value is created, and by addressing common forms of aggressive tax planning and avoidance practices that impact the internal market, the ATAD has become a crucial cornerstone of the EU’s strategy to combat tax evasion. As a second phase of the global BEPS initiative, the ”EU Pillar Two Directive” or “GloBE Directive” (Global anti-Base Erosion Directive) has transposed the OECD Model Rules on Pillar Two into EU law, which aim to introduce a global minimum tax rate.

…has transposed the OECD Model Rules on Pillar Two into EU law, which aim to introduce a global minimum tax rate. The EBF welcomes the initiative to reconsider the ATAD framework with a view to ensuring the continuous enhancement of the EU’s tax framework and addressing any regulatory overlaps and possible frictions between ATAD and the GloBE Directive. • Regulatory overlap: Both Pillar 2 and ATAD share a mutual policy objective of preventing base erosion and profit shifting to low or very low taxed jurisdictions. This regulatory overlap inevitably leads to increased administrative burdens for businesses operating within the EU that are in scope of both Pillar 2 and ATAD provisions.

…burdens for businesses operating within the EU that are in scope of both Pillar 2 and ATAD provisions. As the introduction of a global minimum tax rate within the Global Anti-Base Erosion Model Rules (GloBE) directly addresses the core objectives of ATAD, the provisions of ATAD may at least partially have become redundant. This redundancy is particularly evident in relation to the rules on Controlled Foreign Companies (CFC). Ref.

…redundant. This redundancy is particularly evident in relation to the rules on Controlled Foreign Companies (CFC). Ref. Ares(2024)6378993 - 09/09/2024 09 September 2024 European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 2 www.ebf.eu • Harmonization needs: To avoid conflicts and ensure a coherent tax policy, we believe that it would be more efficient to harmonize existing ATAD rules with the Pillar Two framework, rather than maintaining two parallel systems. Simplifying these regulations into a single, clear and consistent framework would greatly facilitate compliance and enforcement and reduce complexities for businesses operating within the EU. 2.

…greatly facilitate compliance and enforcement and reduce complexities for businesses operating within the EU. 2. Detailed comments The recent implementation of Pillar Two in the EU has added to the complexity faced by large multinational groups (MNEs) due to the concurrent application of a complex general set of rules with equally complex, narrower, and more targeted anti-avoidance measures included in Council Directive (EU) 2016/1164 (“ATAD”). In fact, both Pillar Two and the ATAD share a mutual policy objective of preventing base erosion and profit shifting to low or very low taxed jurisdictions. However, Pillar Two global minimum tax takes a much broader approach without targeting any specific avoidance strategy and achieves the desired results whilst introducing a general safety net.

…targeting any specific avoidance strategy and achieves the desired results whilst introducing a general safety net. Regarding the interplay between GloBE and ATAD, there is an excessive administrative burden for businesses in scope of the two directives. Despite differences in rule design—ATAD targeting specific situations and GloBE addressing the overall effective level of taxation—their purposes overlap: both aim to ensure fair taxation and combat aggressive tax planning that leads to tax avoidance and erosion of the tax base. Consequently, both directives address similar issues, such as CFC rules, hybrid mismatches and general anti-abuse measures. Managing both sets of rules simultaneously results in excessive administrative costs for companies without yielding better outcomes.

…sets of rules simultaneously results in excessive administrative costs for companies without yielding better outcomes. When assessing the effectiveness and necessity of current measures, policymakers should aim to reduce ATAD's overlap with GloBE where possible, since it creates a risk of double regulation. For instance, companies within the scope of GloBE should be exempt from ATAD’s interest limitation rules. This is particularly relevant for banking groups, which typically have a positive net interest income. Streamlining administration in this context would benefit businesses without compromising the directives’ objectives. As previously highlighted, the ATAD Directive aimed to establish minimum rules to prevent tax avoidance and ensure a minimum level of protection for the tax bases of Member States, in line with OECD recommendations.

…and ensure a minimum level of protection for the tax bases of Member States, in line with OECD recommendations. The second objective aligns fully with the goal of the Council Directive on a global minimum level of taxation (EU 2022/2523). Consequently, some measures introduced by ATAD have become redundant due to the requirement of a top-up tax to ensure this minimum level of taxation. This redundancy is particularly evident in relation to the rules on Controlled Foreign Companies (CFC). These rules allow the income of a controlled subsidiary, subject to a low level of taxation, 09 September 2024 European Banking Federation aisbl Brussels / Avenue des Arts 56, 1000 Brussels, Belgium / +32 2 508 3711 / [email protected] Frankfurt / Weißfrauenstraße 12-16, 60311 Frankfurt, Germany EU Transparency Register / ID number: 4722660838-23 3 www.ebf.eu to be reassigned to its parent company.

Germany EU Transparency Register / ID number: 4722660838-23 3 www.ebf.eu to be reassigned to its parent company. The parent company then becomes liable for tax on the reassigned income in its country of residence for tax purposes. This is exactly the same effect sought by the requirement of a top-up tax on the parent company for profits earned by its subsidiaries located in low-tax jurisdictions, leading to clear situations of double taxation without any provision currently in place to address these situations. Therefore, it is considered necessary to review the CFC rules to exempt them from application when the controlled entity is a resident in a jurisdiction that has enacted a national top-up tax or when its parent company is subject to a top-up tax that complies with the rules of Pillar Two.

…a national top-up tax or when its parent company is subject to a top-up tax that complies with the rules of Pillar Two. In conclusion, we believe that harmonizing the existing ATAD rules with the Pillar Two framework is crucial to avoid conflicts and ensure a coherent tax policy. By consolidating these regulations into a single, clear, and consistent framework, compliance and enforcement would be greatly facilitated, thereby reducing complexities for businesses operating within the EU.

…and enforcement would be greatly facilitated, thereby reducing complexities for businesses operating within the EU. Apart from the aforementioned general considerations, we would also like to take the opportunity to provide some specific comments regarding the current interest limitation deduction rules as laid down in article 4 of the ATAD Directive : • As the objective of this rule is to curtail tax avoidance through excessive debt financing, the outcome of this review should not be to extend the current rule and impose additional restrictions on interest deductibility which would hit genuine business operations of corporate income tax payers. Any additional reduction on interest cost deductions would come as an additional cost for and burden on borrowers which could hamper their ability to invest, including a.o.

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