EU - Tax

On 11 March 2025, the EU reached a political agreement on the new Directive on Administrative Cooperation (DAC 9). 1This new directive aims to update the Directive with the new requirements brought by Pillar II rules (the GloBE directive)2 on exchange of information. This address mostly the Top-up tax information return (TTIR) that must be filed to the administration.3

Under the GloBE directive, each entity of an in-scope group will have to file to its local tax administration a TTIR. However, the Globe directive offers the possibility for a group to file the TTIR only once.5 This filing may be done by the Ultimate Parent Entity (UPE) or any designated entity. The condition for a single filing is that information in the return be exchanged with the relevant Member states. The DAC 9 aims to precise the practical implementation of this exchange of information.

The format of the TTIR that needs to be filed mirrors the GloBE Information Return (GIR) template set by the Inclusive Framework on BEPS of the OECD.4It will be attached in the Annex of the DAC 9.

As for the exchange of information between tax authorities, the member state’s administration receiving the GIR will have to share some information according to a so-called dissemination approach. The model is largely aligned with the Multilateral Competent Authority agreement.6

The Member state of the UPE will receive the entire top-up tax information returns. The Member State with a qualified Income Inclusion Rule and or qualified Undertaxed Profits Rule will receive the general full section of the GIR. The Member States with a Qualified Domestic Minimum Top-upTax will receive part of the general section. Finally, the Member states with taxing rights under the GloBE directive will receive the jurisdictional section.

The different information will have to be exchanged within three months upon reception of the returns. This deadline should be extended to six months upon the first year of implementation.

As the first filing will have to take place for fiscal year 2024, this directive is welcomed for clarifying the applicable exchange of information regime.

The EU should soon adopt DAC 9, and subsequent implementation in Luxembourg should follow quickly as the proposed deadline for implementation is 31 December 2025.

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[1] Proposal for a Council Directive amending directive 2011/16/EU on administrative cooperation in the field of taxation, COM (2024) 497.

[2] Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union (GloBE directive).

[3] Article 44 GloBE Directive.

[4] The GloBE Information Return sets out a standardised information return to facilitate compliance with and administration of the GloBE Rules. The GIR was released by the Inclusive Framework on BEPS in July 2023.

[5] Article 44(3) GloBE Directive.

[6] Multilateral Competent Authority Agreement on the exchange of Country-by-Country reports