DAC9: EU proposal for harmonising the GloBE Information Return
On 28 October 2024, the EU Commission published a proposal to amend the DAC Directive, known as DAC9. The goal is to simplify the reporting obligations for global minimum taxation and to create a unified framework for the central filing and exchange of the GloBE Information Return (GIR) between EU member states. Meanwhile, negotiations on international agreements for exchange of the same information with third countries are also taking place.
Background
The new directive amendment aims to enable multinational companies (MNEs) within the scope of Pillar 2, to report the data relevant to the required GloBE Information Return in one EU jurisdiction through a single entity, thereby reducing the reporting challenges.1 In the absence of appropriate arrangements for the exchange of such information, GIRs will need to be submitted separately for each jurisdiction in which the MNE has a constituent entity. DAC9 aims to establish a standardised, legally secure reporting procedure within the EU.
If the Council of the European Union agrees, the directive should be implemented into national law by the end of 2025 for the majority of Member States. Estonia, Latvia, Lithuania, Malta and Slovakia have elected to defer application of IIR and UTPR until 31 December 2029 and will only be required to implement this information exchange directive before that date.2 However, it remains to be seen how Member States ultimately implement the directive.
For 31 December year end MNEs producing annual financial statements the first reporting year was the year ended 31 December 2024. Companies with a fiscal year matching the calendar year are required to submit their first GIR by June 30, 2026. While the normal requirement for filing a GIR is within 15 months after the end of the fiscal year, there is an 18 month deadline for the first return. Tax authorities must automatically forward the return to other relevant Member States within three months of the GIR filing date (i.e. by 30 September 2026 for the first returns) or the date from which the GIR is received if later.
Supporting tax departments in data management
There is a significant number of data points required to collate the information for the GIR. The complexity of gathering potentially in excess of 200 data points, many of which are not catered for in standard financial reporting systems can be greatly assisted by the use of special software solutions. The core value of the Forvis Mazars Pillar 2 Tool is the ability to process all Pillar 2-relevant information – including financial statement reporting purposes – in one central place and to execute necessary calculations. Furthermore, the tool enables taxpayers to convert data into required formats, especially the new mostly unified DAC9 format, with the goal to transmit the report automatically wherever possible. The tool was developed on an interdisciplinary basis by the Forvis Mazars Digital Tax and International Tax teams. In close cooperation with our Pillar 2 experts around the world, we offer companies a holistic and integrated approach to meeting their Pillar 2 obligations.
For the rapid implementation of the Commission’s proposal, it is up to the Council and the Member States to set the legislative course for unified reporting. It is also hoped that negotiations between the EU and third countries will quickly result in international agreements that promote a unified reporting standard.
Significance for practice
The initiative to implement the GloBE Return into EU law aims for unified and more efficient tax reporting, offering significant opportunities for member States, companies and their service providers to simplify reporting obligations. If agreements between the EU Member States and third countries are successfully implemented, these simplifications will also be available at a broader international level. However, the challenges associated with capturing and ensuring the quality of relevant data, will remain.
Contact
For technical questions, the Forvis Mazars Digital Tax Team led by partner Christian Würschinger is available. For tax queries and questions about the advisory approach for the Pillar 2 tool, the Forvis Mazars International Tax team led by partner Florian Mengele is at your disposal.
- See European Commission. Proposal for a COUNCIL DIRECTIVE amending Directive 2011/16/EU on administrative cooperation in the field of taxation https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52024PC0497 [November 8, 2024]. ↩︎
- See https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C_202301536 [January 7, 2025.] ↩︎
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