New EU proposal to simplify Pillar 2 filing obligations for MNEs

On 28 October 2024, the EU Commission published a proposal to amend the directive on administrative cooperation in tax matters (DAC 9 proposal). The DAC 9 proposal is closely linked to the Pillar 2 Directive, which aims to ensure a global minimum level of taxation for multinational enterprise groups (MNEs) and large-scale domestic groups in the EU. 

The DAC 9 proposal incorporates the OECD’s GloBE top-up tax information return into EU law and simplifies the filing obligations of MNEs. It allows MNEs to move away from local reporting to a centralised report filed by the ultimate parent entity of the MNE or by a designated entity, instead of each constituent entity of the group filing a separate report. The DAC 9 proposal also establishes a framework to facilitate the exchange of top-up tax information returns between Member States in line with the OECD framework.

Once the directive is adopted, Member States will have until 31 December 2025 to implement DAC 9 into domestic law.

MNEs are expected to file their first top-up tax information return by 30 June 2026, as required under the Pillar 2 Directive. The relevant tax authorities must exchange this information with each other by 31 December 2026 at the latest.