- Background of DAC: The Council Directive 2011/16/EU (DAC) establishes rules for cooperation between EU Member States’ tax authorities, including various forms of information exchange and advanced cooperation tools.
- Evaluation Requirement: Article 27 of DAC mandates the European Commission to report on its application every five years. The current evaluation covers the period from 2018 to 2022.
- Public Consultation: An external contractor conducted an in-depth study, and a public consultation was held from May to July 2024 to gather stakeholder feedback.
- Stakeholder Participation: 55 stakeholders participated, including business associations, companies, tax intermediaries, NGOs, and academic institutions, with significant representation from Belgium and France.
- Key Tax Issues: Stakeholders assessed DAC’s relevance in addressing tax base erosion, aggressive tax planning, and harmful tax competition. Opinions varied on the extent of these issues and their improvement over time.
- Effectiveness of AEOI: Automatic Exchange of Information (AEOI) under DAC2 is seen as effective in reducing tax evasion by individuals holding financial assets abroad, though opinions on its impact on income or rents abroad are mixed.
- DAC’s Impact on Tax Fairness: Stakeholders generally agree that DAC has contributed to reducing tax evasion and increasing transparency but are less convinced about its impact on tax fairness and the functioning of the EU single market.
- Complexity and Costs: DAC6, which deals with cross-border arrangements, is perceived as complex and costly, particularly for large multinational corporations. Stakeholders suggest extending reporting deadlines and improving clarity.
- Coherence with Other Frameworks: There are calls for better alignment of DAC with international frameworks like FATCA and OECD Pillar II, as well as other EU legislation to reduce compliance burdens and enhance clarity.
- Next Steps: The collected data will inform the final report on the second DAC evaluation, which the European Commission will submit to the European Parliament and the Council in early 2025.
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