COMMISSION STAFF WORKING DOCUMENT EVALUATION Accompanying the document Report from the Commission to the European parliament and the Council on the evaluation of Council Directive 2011/16/EU on administrative cooperation in the field of taxation
Date: 2025-11-19
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European tax cooperation, administrative cooperation, application of EU law, direct tax, exchange of information, tax authorities, tax avoidance, tax evasion

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.11.2025  SWD(2025) 365 final  COMMISSION STAFF WORKING DOCUMENT EVALUATION  Accompanying the document Report from the Commission to the European parliament and the Council on the evaluation of Council Directive 2011/16/EU on administrative cooperation in the field of taxation {COM(2025) 695 final}  
 
 
Contents 

1. 

INTRODUCTION ................................................................................................................... 1 

1.1. The evaluation methodology and sources ............................................................................. 3 

2.  WHAT WAS THE EXPECTED OUTCOME OF THE INTERVENTION? ........................... 3 

2.1. Description of the intervention and its objectives ................................................................. 3 

2.2. Points of comparison ............................................................................................................. 6 

3.  HOW HAS THE SITUATION EVOLVED OVER THE EVALUATION PERIOD? ............. 8 

3.1. Current state of play .............................................................................................................. 8 

3.1.1. Implementation 

 ..................................................................................................... 8 

3.1.2. Infringement procedures ................................................................................................ 9 

3.1.3. Case law 

 ..................................................................................................... 9 

3.1.4. Volumes of exchange  ................................................................................................... 10 

3.1.5. External recommendations and Commission’s responding initiatives ........................ 18 

4.  EVALUATION FINDINGS (ANALYTICAL PART) ........................................................... 20 

4.1. To what extent was the intervention successful and why? .................................................. 20 

4.1.1. Effectiveness 

 ................................................................................................... 20 

4.1.2. Efficiency 

 ................................................................................................... 36 

4.1.3. Coherence 

 ................................................................................................... 40 

4.2. How did the EU intervention make a difference and to whom (EU added value)? ............ 40 

4.3. Is the intervention still relevant (relevance)? ...................................................................... 41 

5.  WHAT ARE THE CONCLUSIONS AND LESSONS LEARNED? .................................... 43 

5.1. Conclusions 

 .................................................................................................... 43 

5.2. Lessons learned 

 .................................................................................................... 46 

ANNEX I: PROCEDURAL INFORMATION............................................................................... 50 

ANNEX II. METHODOLOGY AND ANALYTICAL MODELS USED ..................................... 53 

ANNEX III. EVALUATION MATRIX .......................................................................................... 55 

ANNEX IV. OVERVIEW OF BENEFITS AND COSTS .............................................................. 59 

ANNEX V. STAKEHOLDERS CONSULTATION - SYNOPSIS REPORT ................................. 69 

ANNEX VI. THE INTERVENTION LOGIC DIAGRAM ............................................................ 80 

ANNEX VII. LEGAL DEVELOPMENTS FROM 2018 ............................................................... 81 

ANNEX VIII. DAC6 HALLMARKS ............................................................................................ 85 

ANNEX IX. REPLIES FROM MEMBER STATES ON DAC6 HALLMARKS.......................... 96 

ANNEX X. SUMMARY OF THE VISDAC RECOMMENDATION REPORT ........................ 115 

ANNEX XI - TARGETED CONSULTATION WITH ECONOMISTS ...................................... 118 

ANNEX XII – TARGETED CONSULTATION WITH TAX LAW EXPERTS .......................... 122 

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Advance Pricing Agreement - APA 

Glossary 

An  agreement  between  a  tax  authority  and  a  taxpayer,  either  a  natural  or  legal  person, 
regarding  the  methodology  to  be  used  to  determine  the  transfer  pricing  for  a  set  of 
transactions.  

Advance Tax Ruling - ATR 

A binding interpretation of fiscal provisions which is issued by a public authority on request 
from an individual or corporate taxpayer. As synonym, the simple word ‘ruling’ is used.  

Automatic exchange of information - AEOI 

A key activity under the Directive on administrative cooperation in direct taxation, it refers to 
systematic communication of predefined tax-related information from one Member State to 
another  Member  State,  without  prior  request,  at  pre-established  regular  intervals.  As 
synonym, the evaluation uses the term ‘automatic exchanges’.  

Central directory 

Automatic  exchange  of  information  by  means  of  a  database,  hosted  by  the  Commission 
(without access to information) to which all Member States have access. This ensures that the 
tax  authorities  have  all  the  information  available  which  allows  for  swift  and  coordinated 
action by Member States as needed. 

Country-by-Country Reporting - CbCR 

The obligation for certain multinational enterprises to provide tax authorities with a detailed 
geographical  account  of  key  financial  data  and  information  on  the  performance  of  the 
company and the taxes paid.  

Deterrent effect  

Change in taxpayers’ behaviour originating from the risk of detection posed by the increased 
information available to tax authorities, resulting in voluntary tax compliance.  

Exchange of Information on Request - EOIR 

Transmission  by  the  requested  tax  authorities  of  information  expressly  solicited  by  a 
requesting tax authority, which is either already available in existing databases, or requires 
enquiries for its collection.  

Joint audit 

Administrative enquiry jointly conducted by the tax authorities of 2 or more Member States 
and linked to one or more persons of common or complementary interest to the tax authorities 
of those Member States. 

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Matching  

Process of combining the information received from foreign tax authorities with the national 
taxpayers’ databases. The matching process can be made automatically, i.e. using a computing 
algorithm, or manually.  

Presence in Administrative Offices / Participation in Administrative Enquires - PAOE 

Presence  of  the  requesting  tax  authority’s  officials  in  the  administrative  offices  /  during 
administrative enquires in the territory of the requested tax authority.  

Risk assessment 

Tax risk assessment is a key element of modern tax administration. It allows tax authorities 
to identify indicators that suggest specific taxpayers or arrangements may pose an increased 
risk to their jurisdiction and require further actions in terms of compliance. In general, EU tax 
authorities  use  automated  methods  based  on  domestic  data  and  information  received  from 
other jurisdictions. Yet, a manual element may remain, as (i) tax authorities vary in terms of 
whether  tax  risk  assessment  is  conducted  centrally  by  a  specialist  risk  assessment  team 
incorporating input from the compliance function, or locally by the compliance team (or tax 
inspector); (ii) some data types remain challenging to be automatically processed, e.g. literal 
summaries. 

Simultaneous Control  

Tax controls carried out simultaneously by 2 or more tax authorities in their own territory, on 
one or more taxpayers of common interest.  

Spontaneous Exchange of Information - SEOI 

Unsystematic provision of information that the supplying tax authority deems to be of interest 
to the receiving tax authority.  

Visits on DAC - VISDAC 

Visits to Member States to support the effective implementation and functioning of the DAC, 
with a focus on quality of information exchanged and use of information.  

European Union Advanced International Administrative Cooperation - EU -AIAC 

Network of experts from 27 tax authorities which supports and promote the use of Advanced 
International Administrative  Cooperation  (AIAC)  -  i.e.  multilateral  controls  (MLC,  a  term 
covering both simultaneous controls and joint audits) and Presence in Administrative Offices 
and  Participation  in  Administrative  Enquiries  (PAOE)  -  on  complex  cross-border 
arrangements  and  complicated  cases  of  tax  fraud,  tax  evasion  and  tax  avoidance  in  VAT, 
excise duties, and direct taxes. It is funded by FISCALIS. 

3 

 
 
 
Acronym 

Meaning or definition 

AML 

BEPS 

BO 

CCN/CSI 

Anti-Money Laundering 

Base Erosion and Profits Shifting 

Beneficial ownership 

Common Communication Network/Common Systems 
Interface 

CESOP 

Central Electronic System of Payment 

CRS 

ECA 

EOI 

EP 

LPP 

MCAA 

MNEs 

OECD 

TIN 

TSI 

VIES 

Common Reporting Standard 

European Court of Auditors 

Exchange of Information 

European Parliament 

Legal professional privilege 

Multilateral Competent Authority Agreement 

Multinational Enterprises 

Organisation for Economic Co-Operation and 
Development 

Taxpayer Identification Number 

Technical Support Instrument 

VAT Information Exchange System 

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1. 

INTRODUCTION 

Council Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC, 
DAC1 or the Directive) replaced the previous mutual assistance framework from 1977 and 
established  rules  and  procedures  for  close  cooperation  between  Member  States’  tax 
authorities on direct taxation1 matters.  

The Directive aims to ensure the correct assessment of taxes in cross-border situations and 
to combat tax fraud, evasion and avoidance. To achieve this, the DAC sets up a common 
framework for cooperation between Member States, enabling them to assist each other 
by way of the exchange of information  (on request,  automatically or spontaneously) as 
well  as  other  forms  of  cooperation  such  as  participation  in  administrative  enquiries, 
presence in administrative offices, simultaneous controls and joint audits.  

Article 27(1) of the DAC requires the European Commission to submit a report on the 
application of the DAC to the European Parliament and the Council, every 5 years from 1 
January 2013. The first evaluation of the DAC2 covering the period from 2013 to 2017, 
was published in 2019 and was based on a study carried out by an external contractor. The 
present evaluation is the second iteration and covers the period from 2018 to 20233.  

The Directive and its main cooperation tool automatic exchange of information (AEOI) is 
relatively  recent.  Although  mechanisms  to  facilitate  bilateral  exchange  upon  request 
featured in the previous Directive from 1977, the EU introduced AEOI in 2005 through 
Council Directive 2003/48/EC (Savings Tax Directive), however with  limited scope. In 
2011, DAC1 expanded AEOI to cover a broad category of income and capital. Since then, 
the  framework  has  been  constantly  evolving  to  remain  in  line  with  international 
developments which have resulted in the expansion of the information to be reported and 
exchanged  on:  financial  account  information  (DAC2),  cross-border  tax  rulings  and 
advance  pricing  agreements  (DAC3);  country-by-country  reports  (CbCR)  (DAC4); 
reportable  cross-border  arrangements  (i.e.  arrangement  presenting  an  indication  of  a 
potential risk of tax avoidance) (DAC6); income received from  platforms (DAC7); and 
crypto  assets  and  e-money  (DAC8). Amendments  also  allowed  tax  authorities  to  have 
access to certain anti-money laundering (AML) data (DAC5) and, more recently, extended 
the scope of AEOI on royalties, non-custodial dividends and cross-border rulings related 
to individuals and the possibility to carry out joint audits (DAC7 and DAC8). The most 
recent  amendment  (DAC9)  provides  for  the  exchange  of  information  required  by  the 
Council  Directive  on  ensuring  a  global  minimum  level  of  taxation  for  multinational 
enterprise groups and large-scale domestic groups in the Union.  

1  The scope of the DAC encompasses all taxes of any kind with the exception of value added tax, 

customs duties, excise duties and compulsory social contributions because these are already covered 
by other EU legislation on administrative cooperation. 

2  Commission staff working document: Evaluation of the Council Directive 2011/16/EU, 12 February 

2019. 

3  For 2024 only very limited data is available and is therefore not covered in the Evaluation. However, 

where data is available it is presented in the analysis. 

5 

 
 
The  scope  of  the  current  evaluation  includes  all  the  amendments  to  DAC  up  to  DAC5 
which were already covered in the first evaluation and goes further by including DAC6 
(which was previously excluded in the 2019 evaluation as it had not yet been transposed 
and implemented by Member States). Regarding DAC7, only  qualitative information  is 
provided, as the first relevant exchanges took place in February 2024. DAC8, on the other 
hand, is not covered in this evaluation, as the first relevant exchanges will commence in 
September 2027. However, as a result of the amendments to Article 27(2) of the DAC (by 
way  of  the  amendment  to  DAC8),  the  scope  of  the  current  evaluation  includes  the 
hallmarks  for  the  exchange  of  information  on  potentially  harmful  cross-border 
arrangements provided for by DAC6. 

The  key  objectives  of  this  evaluation  reflect  those  of  the  first  evaluation  by  aiming  to 
evaluate  the  DAC  and  its  amendments  based  on  the  5  better  regulation  criteria  – 
effectiveness, efficiency, coherence, EU added value and relevance4.  

The  evaluation  firstly  examines  whether  the  DAC  is  effective  in  providing  the  desired 
outcomes and impacts. It assesses whether the information exchange is usable in terms of 
completeness, quality and timeliness, and whether it is possible to match the information 
received with specific taxpayers in the receiving Member State. It also examines whether 
the DAC has sufficient deterrent effect and assesses its impact on the twin objectives of 
safeguarding  Member  States’  tax  revenues  and  improving  the  functioning  of  the  single 
market. 

Secondly, the evaluation looks at the efficiency of the exchange of information and other 
tools of cooperation provided for under the DAC, in cost-benefit terms. In line with the 
Commission’s  ongoing  action  to  rationalise  and  simplify  reporting  requirements  for 
companies and administrations, specific attention has been given to identify areas where 
there  is  potential  to  reduce  unnecessary  regulatory  costs  and  simplify  the  design  and 
implementation of the Directive. 

Thirdly, the evaluation assesses whether the DAC’s scope and purpose remain relevant, 
and if it addresses challenges that Member States are facing in terms of correct assessment 
of taxes in cross-border situations whilst fighting tax avoidance and evasion. Furthermore, 
especially  given  the  successive  amendments  to  the  DAC,  it  is  necessary  to  evaluate  its 
internal and external coherence as well as its consistency with other relevant EU and 
international initiatives, mainly with respect to standards developed at OECD.  

Lastly, the EU added value is assessed, especially in comparison to other internationally 
available tools to facilitate the exchange of information. 

4  The present evaluation follows and fulfils the Commission’s Better Regulation requirements as 

updated in July 2023. See “Better regulation” guidelines (2021) and toolbox (2023): Better regulation: 
guidelines and toolbox. 

6 

 
 
1.1. 

 The evaluation methodology and sources 

The  methodology5  used  in  this  evaluation  is  in  line  with  that  of  the  first  evaluation  to 
ensure the comparability of results.  

The evaluation methodology  consisted of 3 main phases:  (i)  a structuring phase, which 
included  preparatory  activities  for  designing  and  developing  the  evaluation  –  such  as 
selecting an external contractor and identifying relevant stakeholders to be consulted; (ii) 
data collection and analysis, involving stakeholder consultations, legal and desk research, 
and analytical work to support the assessment; and (iii) evaluation and insights, where the 
collected information was analysed to produce the evaluation report by examining the 5 
better regulation criteria and subsequently drawing conclusions and lessons learned. 

The evaluation is primarily based on the findings of the external study carried out in 2023 
by  a  consortium  led  by  Ramboll.  Other  sources  include  the  results  of  the  public 
consultation  conducted  by  the  Commission  services  in  2024,  and  a  collection  of  data 
sources, such as feedback provided by Member States and private stakeholders6. Data from 
Member States includes their replies to the yearly questionnaires (on the functioning of the 
DAC and on the assessment of AEOI) as well as their replies to specific Commission led 
questionnaires  (e.g.  2  surveys  on  the  relevance  of Annex  IV  on  DAC6  hallmarks). The 
outcome of relevant work under the Fiscalis programme has also been taken into account 
(i.e. FPG/037, FPG/038, VISDAC Expert Team, FWS/022, FWS/153). 

2.  WHAT WAS THE EXPECTED OUTCOME OF THE INTERVENTION? 

2.1. Description of the intervention and its objectives 

An increasingly globalised economy characterised by cross-border transactions, growing 
taxpayer mobility and the expanding digital landscape, presents constant challenges to the 
national application of direct taxation. Member States struggle to protect their national 
tax bases and therefore require greater access to information across jurisdictions to 
ensure accurate tax assessments, particularly for multinational enterprises (MNEs). As the 
economic environment evolves, so does the need for more harmonised policy approaches 
on  the  exchange  of  information  to  address  emerging  and  evolving  challenges,  as 
described below7. 

2.1.1.  DAC1: Early Development and Introduction of Administrative Cooperation (2011) 

In  2009,  the  Commission  proposed  a  new  framework  for  enhanced  administrative 
cooperation. It became increasingly apparent that the model developed in 1977, was no 
longer fit for purpose in addressing the modern challenges faced by national tax authorities. 

5  Further details on the evaluation methodology are provided in Annex II.  
6 

Including financial institutions, multinational enterprises (MNEs), tax advisors, law firms and lawyers, 
accountants, professional organisations, lobbies registered in the transparency register. 

7  A graph depicting the intervention logic of the Directive described in this subsection is provided in 

Annex VI. 

7 

 
 
DAC1 was adopted by the Council in 2011 and transposed by Member States by 2013, 
covering all taxes expect VAT and excise duties.  

The core issue driving the need for reform was the increased level of cross-border activity 
in the EU, meaning Member States required greater levels of multilateral information for 
the  purposes  of  direct  taxation.  Therefore,  the  Directive  sought  to  promote  better 
cooperation,  establish  common  rules,  and  enhance  trust  between  tax  authorities, 
through  a  more  efficient AEOI,  improved  communication  channels,  and  the  creation  of 
common procedural standards. 

DAC1  laid  the  foundations  for  large-scale AEOI  on  5  categories  of  income  and  assets, 
namely  (i)  employment  income,  (ii)  director’s  fees,  (iii)  life  insurance  products,  (iv) 
pension income, and (v) ownership of immovable property. It also provided Member States 
with  a  harmonised  framework  for  cooperation  instruments  such  as  (i)  exchange  of 
information on request (EOIR) used when a Member State seeks additional information 
from another Member State for tax purposes and that the requested information is relevant 
to  the tax  affairs of one  or several  taxpayers; (ii) spontaneous  exchange  of information 
(SEOI), which takes place if a Member State discovers any information relevant or useful 
to another Member State on taxation matters, and sends it to that Member State; (iii) the 
presence  of  officials  of  a  Member  State  in  the  offices  of  the  tax  authorities  of  another 
Member State (PAOE); (iv) simultaneous controls allowing 2 or more Member States to 
conduct controls of taxpayers of common or complementary interest; and (v) requests for 
notifying tax instruments and decisions issued by the authority of another Member State. 
2 additional categories of income (royalties and non-custodial dividends) were introduced 
for exchange under the AEOI framework through the DAC7 and DAC8 amendments to 
DAC1. 

In 2012, the Commission published an Action Plan to strengthen the fight against tax fraud 
and tax evasion. The Recommendation on aggressive tax planning highlighted the need to 
promote the AEOI as the future European and international standard for transparency and 
exchange of information in tax matters.  

In its conclusions of 22 May 2013, the European Council called for the extension of AEOI 
at both EU and global level with a view to combating tax fraud, tax evasion and aggressive 
tax planning, which led to several amendments to the DAC. 

2.1.2.  DAC2: Expansion of Automatic Exchange of Information on financial assets and 

income (2014) 

To address the tax transparency challenges posed by bank secrecy and hidden wealth in 
foreign  accounts,  the  OECD  developed  the  Common  Reporting  Standard  (CRS).  In 
response,  the  Council  adopted  DAC2  in  2014,  expanding  the  automatic  exchange 
framework to financial account information and marking the end of the bank secrecy in 
the EU. DAC2 aligned with OECD CRS to reduce administrative costs and burdens for tax 
authorities  and  businesses  by  preventing  multiple  reporting  and  exchange  standards.  In 
addition,  a  subsequent  amendment  to  DAC2  introduced  enhanced  due  diligence 

8 

 
requirements for financial institutions, aiming to strengthen the accuracy and completeness 
of information reported (DAC8). 

2.1.3.  DAC3: Ruling Transparency and Information Exchange on Tax Rulings (2015) 

Advance  tax  rulings  (ATRs)  and  advance  pricing  arrangements  (APAs)  promote  tax 
transparency and legal certainty, fostering investment in the single market. However, some 
rulings have been used to enable artificially low taxation and profit shifting. To address 
this, the Council adopted DAC3, building on OECD’s Base Erosion and Profit Shifting 
BEPS Action 5, to  mandate the automatic  exchange of information  on  cross-border tax 
rulings  and  transfer  pricing  arrangements  amongst  Member  States  with  a  view  to 
increasing  transparency,  curbing  harmful  tax  practices  and  ultimately  reducing  the 
opportunities  for  tax  avoidance.  It  also  established  a  central  directory  to  enhance 
coordination  and  reduce  administrative  burdens.  By  way  of  the  DAC8  amendment  to 
DAC3, the automatic exchange of ATRs was extended to cover rulings involving the tax 
affairs of individuals when either (i) the amount of the transaction or series of transactions 
covered by the ruling exceeds EUR 1.5 million, or (ii) the ruling determines, or is intended 
to determine, the tax residence of the individual. 

2.1.4.  DAC4: Addressing Multinational Enterprises and BEPS (2016) 

The  financial  crisis  and  its  consequences  brought  greater  public  attention  to  the  tax 
practices of MNEs exploiting loopholes in tax laws to shift profits to low-tax jurisdictions. 
DAC4,  aligned  with  the  OECD’s  BEPS  Action  13  and  the  Multilateral  Competent 
Authority  Agreement  on  exchange  of  country-by-country  reports  (“CbCR  MCAA”), 
imposed  new  transparency  requirements  on  MNEs  as  a  tool  intended  to  allow  tax 
authorities  to  perform  high-level  transfer  pricing  risk  assessments,  or  to  evaluate  other 
BEPS-related risks. MNEs are required to report annually on their operations in each tax 
jurisdiction,  including  financial  data  such  as  revenue,  profits,  and  taxes  paid,  by  each 
constituent entity.  

2.1.5.  DAC5: Enhancing Access to Beneficial Ownership Information (2016) 

Following several media leaks which exposed widespread tax evasion by way of offshore 
structures,  DAC5  implemented  a  framework  to  grant  tax  authorities  access  to  AML 
information.  By  enabling  tax  authorities  to  access  this  data,  thereby  increasing 
transparency  of  beneficial  ownership  information,  the  Directive  aimed  to  enhance  the 
effectiveness of tax monitoring and enforcement mechanisms.  

2.1.6.  DAC6: Combatting Aggressive Tax Planning (2018) 

DAC6 was a response to the Panama Papers and built upon BEPS Action 12 on mandatory 
disclosure  rules.  The  Directive  aimed  to  increase  the  transparency  of  cross-border  tax 
arrangements  and  to  prevent  the  implementation  of  tax  schemes  used  to  shift  taxable 
income to low-tax jurisdictions. DAC6 imposes reporting requirements on intermediaries 
on  aggressive  tax  planning  schemes  and  is  intended  to  create  a  deterrent  effect  by 
disincentivising intermediaries in creating such schemes. The DAC8 amendment to DAC6 
introduced an exemption for lawyers bound by legal professional privilege (LPP) from the 

9 

 
obligation  to  notify  other  intermediaries  of  their  reporting  duties  under  the  mandatory 
disclosure  rules,  in  order  to  comply  with  the  Court  of  Justice  of  the  European  Union 
(CJEU) ruling in Case C-694/208. 

2.1.7.  DAC7: Sales of services and goods via electronic platforms (2021) 

DAC7  emerged  because  of  the  rapid  digitalisation  in  the  economy  and  the  significant 
expansion  of  digital  platforms  services,  and  cross-border  transactions,  which  led  to 
increasing opportunities for tax fraud, evasion and avoidance. It is noted that national tax 
authorities  often  lack  sufficient  information  to  correctly  assess  and  monitor  the  gross 
income earned by sellers from commercial activities undertaken on digital platforms. In 
response to this need, the Council adopted DAC7 in 2021. The Directive primarily reflects 
the work undertaken at OECD on the Model Reporting Rules for Digital Platforms which 
provides for a report and exchange of information framework for platforms operators on 
their users’ income. DAC7 provides for, inter alia, AEOI on data reported by platforms 
operators  regarding  persons  selling  through  their  intermediation  and  the  consideration 
obtained therefrom.  

2.1.8.  Evolution of DAC 

The evolution of the administrative cooperation legal framework reflects 3 overarching 
general  objectives  which  are  reflected  in  each  of  the  iterations  of  the  Directive:  (i) 
safeguarding Member States’ tax base and revenues, (ii) increasing the transparency and 
fairness of tax systems in the EU, and (iii) contributing to the smooth functioning of the 
single market. More specifically, the amendments to DAC aim to provide Member States 
with the tools to combat tax fraud, evasion and avoidance; foster voluntary tax compliance 
through a deterrent effect; and ensure the uniform implementation of OECD measures to 
prevent a fragmented approach in the EU. 

In terms  of effects,  the amendments  to  the DAC have resulted in  outputs  that serve as 
indicators of its achievements, as analysed further in Section 4 below. 

2.2. Points of comparison 

The  first  evaluation  of  the  DAC  covered  the  period  from  2013  to  2017,  including  all 
amendments to the Directive up to DAC5 and will serve as the point of comparison for 
assessing the intervention of DAC1 to DAC5 from 2018 to 2022. 

Since DAC6 came into force in 2018 and was excluded from the scope of the previous 
evaluation,  the point of  comparison  for  assessing  the intervention of DAC6 will be the 
situation  as  assessed  in  the  impact  assessment  that  accompanied  the  publication  of  the 
proposal in 2017. 

2.2.1. DAC1 to DAC5 – a summary of the conclusion of the previous evaluation 

Although the previous evaluation lacked detailed evidence and data on exchanges due to 
the  short  period  between  implementation  and  evaluation,  the  overall  assessment  of  the 

8  For further details, please see subsection 3.1.3. 

10 

 
 
Directive was positive. The conclusions highlighted several important findings across the 
5 better regulation criteria9.  

In terms of effectiveness, the evaluation found that, to a certain extent, the DAC had been 
effective in helping tax authorities combat tax fraud, evasion, and avoidance, with some 
monetary  benefits  noted.  However,  there  was  limited  evidence  of  a  deterrent  effect. 
Nevertheless,  the  evaluation  highlighted  the  importance  of  high-quality  information 
exchanges and recommended better review processes, improved feedback among Member 
States, and enhanced data collection to strengthen future assessments. 

Regarding efficiency, the Directive’s implementation cost was estimated at approximately 
EUR 230 million, with benefits estimated at around EUR 620 million, suggesting a positive 
cost-benefit ratio. However, the results were inconsistent across Member States. In some 
cases, the benefits  of the intervention outweighed the reported costs, nevertheless more 
concrete data was required. The evaluation recommended that Member States share best 
practices for estimating the benefits of administrative cooperation and suggested efforts be 
made  to  generate  better  quantitative  evidence  to  assess  the  true  benefits  and  cost-
effectiveness of the Directive in the future. 

The  DAC  was  considered  a  highly  relevant  and  appropriate  tool  for  tax  authorities, 
offering  a  set  of  complementary  mechanisms  to  address  their  needs.  However,  the 
evaluation noted that the Directive may need to be adjusted over time to respond to the 
new  challenges  posed  by  an  evolving  economy,  such  as  digitalisation,  the  growing 
importance of intangible assets, and new forms of employment such as the gig economy, 
which in turn influence taxpayers’ behaviour. 

In terms of coherence, the evaluation found no major issues with the Directive or in its 
interaction  with  other  relevant  legal  frameworks.  Despite  frequent  amendments,  the 
internal consistency of the Directive had been largely preserved. However, there were some 
inconsistencies  that  could  hinder  the  efficient  use  of  the  information  exchanged, 
particularly  in  cases  where  strict  interpretations  of  terms  and  national  legal  restrictions 
apply. For example, aligning deadlines for information exchanges could improve internal 
coherence and make the outcomes more efficient. 

Regarding EU added value, the evaluation concluded that the Directive had added value 
by  establishing  a  common  EU  framework  for  administrative  cooperation,  but  not  all 
Member  States  fully  utilise  the  tools  to  the  same  extent.  Therefore,  improving  data 
collection  tracking  how  exchanged  information  is  used  are  essential  to  maximising  the 
Directive’s impact. 

9   The report  on  the  first  evaluation of  the  Directive  was  published  in  December 2017,  accompanied  by 
a staff  working  document. A second  report under Article  8b  of  the  Directive,  which  covers  only  the 
automatic exchange of information mechanisms, was published in December 2018. 

11 

 
 
Overall, the evaluation emphasised the need for continuous improvement in the Directive’s 
implementation, focusing on better quality and tracking of information exchanges, more 
effective use of tools, and enhanced data collection practices. 

2.2.2. DAC6 Impact Assessment  

The DAC6 proposal was accompanied by an impact assessment published in 2017, which 
should therefore serve as the point of comparison for evaluating the amendment introduced 
by  DAC6.  However,  it  is  important  to  note  that  the  Commission’s  proposal  was 
significantly amended during Council negotiations and so the impact  assessment  which 
accompanied the proposal does not fully reflect the final legislative act adopted.  

Nevertheless, the objectives of DAC6 remain relevant: (i) lack of timely information on 
aggressive tax planning schemes for Member States’ tax authorities; (ii) differences among 
national  frameworks  on  disclosure  requirements;  (iii)  ineffective  and  non-transparent 
monitoring  of  compliance  with  existing  law;  (iv)  existing  tax  legislation  may  facilitate 
aggressive tax planning; (v) insufficient beneficial ownership information. 

3.  HOW HAS THE SITUATION EVOLVED OVER THE EVALUATION PERIOD? 

3.1. Current state of play  

3.1.1.  Implementation 

DAC 6 represents the primary focus of implementation work during the evaluation period. 
The Directive had a transposition deadline of 31 December 2019, and first exchanges took 
place in July 2020. The Commission services assisted the Member States in the legal and 
the technical implementation of the Directive by holding several dedicated meetings with 
Member States in 2018 and 2019. 

3.1.1.1. Deferral of DAC6 reporting 

Considering the challenges presented by COVID-19 pandemic, many MNEs and financial 
institutions sought a delay to the reporting deadlines set in the Directive. Council Directive 
(EU) 2020/876 adopted on 24 June 2020 provided Member States with the option to defer 
the  deadlines  for  AEOI  under  DAC2  and  for  filing  and  exchanging  information  on 
reportable cross-border arrangements under DAC6.  

As regards DAC6: (i) the deadline for the reporting historical cross-border arrangements 
(i.e. cross-border arrangements the first step of which was implemented between 25 June 
2018 and 30 June 2020) was deferred from 31 August 2020 to 28 February 2021; and (ii) 
the date for the beginning of the period of 30 days for filing information  on reportable 
cross-border  arrangements  whose  triggering  events  occur  between  1  July  2020  and  31 
December 2020, was postponed to 1 January 2021. 24 Member States opted for a 6-month 
deferral,  1  opted  for  a  3-month  deferral,  and  only  2  proceeded  with  the  date  initially 
provided for in the Directive.  

3.1.1.2. Technical and logistic support 

12 

 
Since 2018, IT tools and formats for the exchange of information have been continuously 
upgraded.  In particular, the Electronic Forms Central Application (eFCA), a centralised 
web-based application for non-AEOI exchanges, was updated to streamline the exchange 
process, reduce operational risks, and facilitate the collection of statistics. Furthermore, the 
alignment of DAC2 message size and format with the CRS standard has been adopted. The 
Commission  has  increased  its  technical  and  logistical  support  to  Member  States  by 
implementing and managing a secure central directory for the exchange of data reported 
under DAC6. 

3.1.2.  Infringement procedures 

In  the  period  under  evaluation,  the  focus  of  implementation  was  on  DAC6,  where  15 
infringement  procedures  were  open  due  to  late  or  non-notification  of  transposition 
measures by Member States. However, each case was closed in advance of referral to the 
Court10. This is consistent with the previous experiences in implementation, where many 
Member States face challenges in transposing the Directive into the national legal order on 
time, which may be due to the fast-paced adoption of amendments to the Directive. By 
contrast,  no  infringements  were  open  regarding  the  substantive  implementation  of 
amendments to the DAC during this period. 

3.1.3.  Case law 

During the evaluation period and thereafter, the Court of Justice of the European Union 
ruled on several aspects of the DAC, particularly DAC6. More specifically, between 2022 
and  2024,  the  Court  issued  3  judgements  regarding  the  DAC’s  compatibility  with  EU 
fundamental rights11.  

While the Court has found the DAC framework to be generally coherent with fundamental 
rights,  it  overturned  one  provision  of  DAC6  to  strengthen  protections  against  reporting 
obligations  for  legal  professional  privilege  (LPP)12.  It  introduced  a  more  restrictive 
interpretation of this concept13, by establishing a strict distinction between attorneys-at-
law  and  other  professionals  and  ruled  that  the  LPP  waiver  applies  only  to  lawyers 
authorised to ensure legal representation of their clients and not to other professionals who 
provide advice. 

With  regard  to  the  principles  of  non-discrimination,  equal  treatment,  legal  certainty, 
legality in criminal matters and the right to respect for private life, the CJEU ruled that the 
Directive,  and  more  specifically,  the  provisions  of  DAC6,  does  not  infringe  any  of  the 
fundamental rights as included in the Charter. The Court also upheld that the provisions 
are sufficiently clear, justified and proportionate to the Directive’s objectives.  

10  See details in Annex VII: Legal developments from 2018. 
11  Further details are provided in Annex VII. 
12  C-694/20 - 08/12/2022 - Orde van Vlaamse Balies e.a. 
13  C-623/22 – 29/07/2024 - Belgian Association of Tax Lawyers and Others v Premier ministre/ Eerste 

Minister. 

13 

 
 
More  recently,  the  CJEU  concluded  that  the  validity  of  the  DAC  vis-à-vis  Articles  7 
(respect for private and family life) and 52 (scope and interpretation) of the Charter is not 
affected and, as a result, is not open to question14. 

3.1.4.  Volumes of exchange  

The Directive provides for a significant level of information exchange.  

The following paragraph presents figures related to the volume of such exchanges. First, it 
outlines the number of exchanges linked to AEOI in various categories, including income 
(DAC1),  financial  accounts  (DAC2),  rulings  (DAC3),  CbCR  (DAC4)  and  potentially 
harmful  cross-border  arrangements  (DAC6).  Secondly,  it  examines  the  volume  of 
exchanges related to information obtained through other forms of cooperation between tax 
authorities,  such  as  EOIR,  SEOI,  administrative  inquiries,  presence  in  administrative 
offices  and  participation  in  administrative  enquiries,  simultaneous  controls,  and 
administrative notifications15. 

3.1.4.1. AEOI 

3.1.4.1.1.  DAC1 

Between  2018  and  mid-2023,  Member  States  exchanged  information  under  DAC1 
concerning  approximately  55.5  million  taxpayers  and  incomes  worth  over  EUR  334 
billion. On an annual basis, from 2018 to 2023, Member States exchanged, on average, 
more than 4,500 messages per year, covering over 9.2 million taxpayers and an average 
value of approximately EUR 55.7 billion. The volume of exchanges per year has shown 
a  substantial  increase  since  the  last  evaluation  study16,  both  in  terms  of  the  value  of 
information exchanged and the number of taxpayers (see Figure 1 below).  

Consistent with the previous evaluation, over the period from 2018 to 2023 the exchanges 
relating to income from employment (IE) and pensions (PEN) were found to be the most 
important, accounting for 70% of taxpayers concerned by DAC1 exchanges and 98% of 
the  value  subject  to  those  exchanges.  Exchanges  related  to  immovable  property  (IP) 
accounted for 29% of taxpayers, but for less than 3% of value in 2023. Exchanges related 
to director’s fees (DF) and life insurance products (LIP) accounted only for a very small 
proportion (1% or less) of both taxpayers and values.  

14  C-432/23 – 26/09/2024 - F and Ordre des avocats du barreau de Luxembourg v Administration des 

contributions directes. 

15  Quantitative information on the volume of exchanges derived from joint audits will not be presented as 

the latter were introduced by DAC7 and started as of 1 January 2024. 

16  The 2019 evaluation study found that Member States had exchanged, between 2015 and mid-2017, 
around 11,000 messages referring to nearly 16 million taxpayers and to incomes/assets worth more 
than EUR 120 billion.  

14 

 
 
Figure 1: Changes in levels of DAC1 exchanges by Message year (2015 - 2023)17 

        DAC1 IE            DAC1 PEN            DAC1 DF             DAC1 IP 
Source: Ramboll study, Commission statistics 

In 2023, nearly all Member States are able to exchange data on income from employment 
(IE) (26), pensions (PEN) (25), immovable property (IP) (24) and director’s fees (DF) (22). 
This  has  not  changed  significantly  over  the  evaluation  periods,  with  only  3  countries 
increasing the number of income categories available (Slovenia for DF, Cyprus for IP and 
Finland for LIP). One third of Member States already hold information on royalties (ROY) 
which is the newest category of income to be exchanged as of 2026 (Tax year 2025). 

3.1.4.1.2.  DAC2  

Between 2018 and early 2023, Member States exchanged information concerning some 
166  million  accounts  relating  to  financial  information  with  a  total  value  of  EUR 
10,546 billion. This marks a substantial increase in the volume of information exchanged, 
with the value of DAC2 information exchanged in 2023 being 75% higher than in 2018. 
This trend was confirmed in 2023: exchanges concerned 43,5 million of accounts, for a 
value of EUR 2,074 billion (see Figure 2 below). 

DAC2 exchanges cover several categories of financial information. In line with findings 
in the first evaluation study, exchanges relating to gross proceeds from redemptions and 
sales  of  financial  assets  was,  in  terms  of  value,  the  category  of  financial  information 
exchanged  corresponding  to  the  largest  amount  apart  from  the  value  of  the  accounts, 
corresponding  to  EUR  4,061  billion  since  2018.  Other  financial  information  on  which 
messages  were  exchanged  include  interest  (amounting  to  some  EUR  223  billion  since 
2018), dividends (EUR 55 billion), and other unspecified payments related to the accounts 
(EUR 856 billion). 

17  The message year is the year in which information is exchanged between Member States. It is different 

from the tax year, which is the year to which the information refers. 

15 

Number of Taxpayers (million)Value of Information Exchanged (EUR million)024681012201520162017201820192020202120222023010.00020.00030.00040.00050.00060.000201520162017201820192020202120222023 
 
 
Figure 2: Changes in levels of DAC2 exchanges by message year, 2017 – 2023 

Source: Ramboll study; Commission statistics 

3.1.4.1.3.  DAC3  

Between 2017 and 2023, 27,298 ATRs/APAs were uploaded in the EU dedicated central 
directory, 8,743 of which were still valid as of June 2023. The number of rulings shared 
under DAC3 was in the 4,000 – 5,000 range in 2018 and 2019, and then decreased during 
the 2020 - 2023 period, ranging around 1,600 – 2,000 rulings per year (see Figure 3 below). 
The number of rulings uploaded during the first year of mandatory reporting (over 11,000) 
is  considerably  higher,  as  it  included  the  backlog  of  ATRs/APAs  issued  from  2012 
onwards still in force at that time. 

Figure 3: Number of ATRs/APAs uploaded per year 

Source: Ramboll study, European Commission statistics 

A  closer  analysis  of  the  distribution  of  the  origin  of  rulings  available  in  the  central 
directory in 2023 reveals the prevalence of a few Member States, namely the Netherlands, 
Luxembourg, Poland and Belgium (see Figure 4 below). 

16 

Number of Accounts (million)Value of Information Exchanged (EUR billion)05101520253035404550201720182019202020212022202305001.0001.5002.0002.5002017201820192020202120222023 
 
 
Figure 4: DAC3 Central Directory - Distribution by originating Member State - 2023  

14000

12000

10000

8000

6000

4000

2000

0

AT BE CY CZ DE DK EE ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK

Source: European Commission statistics 

3.1.4.1.4.  DAC4 

DAC4  statistics  are  collected  yearly  by  Member  States;  they  cover  a  12-month  period 
between July of the previous year and June of the current year. The information concerns 
both the number of reports received by national tax authorities from an Ultimate Parent 
Entity  (UPE)  and  the  exchanges  of  CbCRs  between  Member  States.  When  the  UPE  is 
resident in a third country or is not obliged to file a CbCR in its jurisdiction of tax residence, 
the obligation to file the CbCR falls to those MNE’s entities resident for tax purposes in a 
Member State as a surrogate parent entity. This is to facilitate the collection of CbCRs for 
MNEs not headquartered in the EU. 

As shown in Figures 5 and 6 below, Member States collected an average of approximately 
5,200 CbCRs per year, corresponding to a total of just over 30,000 CbCRs between mid-
2017 and mid-2023. The number of reports received by tax authorities by their UPE based 
in their countries declined between 2018 and 2020 and has remained in the 4,000-4,700 
range since (see Figure 5 below). 

Figure 5: Number of CbCRs collected yearly by Member States 

6.613 

5.781 

4.678 

4.380 

4.741 

4.063 

 8.000

 6.000

 4.000

 2.000

 -

2018

2019

2020

2021

2022

2023

Source: Ramboll study and Commission statistics 

Each  CbCR  collected  by  tax  authorities  can  be  shared  with  one  or  more  of  the  other 
Member  States,  depending  on  which  countries  are  concerned  by  the  reporting  entity’s 
activities.  

17 

 
 
 
Since the first exchange in mid-2017, more than 113,000 exchanges of CbCRs have taken 
place among EU Member States  (see Figure 6 below). The number of exchanges has 
shown  an  increasing  trend  over  the  years.  During  the  first  12  months  of  DAC4 
implementation, Member States exchanged just over 12,000 CbCR in 2018, while more 
than 25,000 reports were shared in 2023.  
Figure 6: Total number of CbCRs sent to another Member State 

Source: Ramboll study and Commission statistics  

3.1.4.1.5.  DAC6  

From the implementation date of DAC6 in mid-2020 and the end of 2023, around 54,000 
arrangements have been uploaded on the central directory by Member States. In 2020, 
only  3  Member  States  uploaded  information  subject  to  DAC6  exchanges,  since  most 
Member States applied the option for deferral introduced due to the COVID-19 pandemic. 
However, starting from 2021, all Member States uploaded reportable arrangements in the 
central directory. In subsequent years, the number of arrangements reported has reduced 
(the  backlog  of  arrangements  corresponding  to  the  years  2018-2020  having  been 
essentially cleared between 2021 and 2023) and is noted at approximately 6,600 per year 
in 2024 (see Figure 7 below). 

18 

 
 
Figure  7:  Number  of  arrangements  reported  every  year  and  total  available  in  the 
Central Directory from 31/12/2020 to 30/06/2024 

30592
23266

45755

15163

7326
7326

54074

60734

8319

6660

Number of arrangements reported

Total of arrangements available in the Central Directory

Source: European Commission statistics (2024) 

The  study  commissioned  on  the  evaluation  of  the  DAC  shows  that  around  half  of  all 
arrangements  reported  solely  concern  non-EU  jurisdictions  (i.e.,  arrangements 
concerning only the reporting Member State and jurisdictions outside the EU, but no other 
Member  States).  The  UK  is  the  primary  third  country  identified  in  the  arrangements 
uploaded in the dedicated central directory, with over 9,500 arrangements identified. This 
includes approximately 1,000 arrangements each concerning the British Virgin Islands and 
the  Cayman  Islands.  The  UK  is  followed  by  the  US  (some  3,400  arrangements, 
approximately 7% of the total) and Switzerland (close to 2,400 arrangements, 5% of the 
total). Another 4 jurisdictions (Russia, the UAE, Canada, and Panama) are concerned by 
700-1,100 arrangements each (approximately 2% of the arrangements exchanged). 

3.1.4.2. Exchange of information on request (EOIR) 

EOIR is  a tool that is  significantly utilised by Member States. EOIR is  used to  request 
“foreseeably relevant”18 information that may concern data already available to requested 
tax  authority  or  obtained  following  administrative  enquiries.  According  to  statistics19, 
between 2018 and 2021, nearly 46,400 requests for information were sent and followed up 
by some 45,350 replies. The yearly number of requests sent to other Member States varied 
between a minimum of just above 7,500 in 2020 and over 10,000 in 2018 and 2022. The 
2018-2022  period  demonstrates  an  irregular  trend.  Over  the  period  under  review,  the 

18  Cf. Article 5 of DAC (Procedure for the exchange of information on request) and 5a (Foreseeable 
relevance). To align with international standards for the EOIR and the conclusions of the CJEU in 
Berlioz Investment Fund SA v Directeur de l'administration des contributions directes (Case C-682/15) 
and B v État Luxembourgeois and État Luxembourgeois v B, C, D and FC (Cases C-245/19 and C-
246/19), allowing tax authorities in one country to obtain information from another country’s tax 
authorities upon request, the concept of foreseeable relevance was clearly codified in DAC7 
amendment (2021). 

19  Commission Implementing Regulation (EU) 2022/1467 of 5 September 2022 amending Implementing 
Regulation (EU) 2015/2378 as regards the standard forms and computerised formats to be used in 
relation to Council Directive 2011/16/EU and the list of statistical data to be provided by Member 
States for the purposes of evaluating that Directive. 

19 

 
 
 
number of requests initiated peaked in 2018, then decreased to a minimum in 2020, most 
likely due to a reduction of tax administration activity during COVID-19. 

EOIRs generally result in full rates of reply. On average, during 2018-2022, the replies 
sent  correspond  to  98%  of  the  requests.  The  option  to  refuse  a  request  for  information 
based on Article 17 of the DAC (on the ground of legal reasons including the disclosure of 
commercial, industrial or professional secret, or of information whose disclosure would be 
contrary to public policy) was rarely used from 2018 to 2020, with an average of 3 refusals 
per year. The number of refusals rose in 2021 and 2022 to 42 and 51 respectively. The 
reason given by the requesting country for refusing a request is generally that the request 
does not relate to the right tax head (wrong legal grounds) or does not fulfil the conditions 
to  be  foreseeably  relevant  (exhaustion  of  domestic  resources  not  demonstrated  by  the 
requesting country). 

3.1.4.3. Spontaneous Exchanges of Information (SEOI) 

As  regards  SEOI  under  Article  9  of  DAC,  a  total  of  over  160,000  SEOI  were  sent  by 
Member  States  between  2018  and  2022.  The  yearly  trend  in  SEOI  remained  highly 
variable, which is  consistent with  the previous evaluation,  ranging  from  6,300 SEOI in 
2020, to over 70,000 in 2018. 

Information  received  through  SEOI  mostly  concerns  employment  income,  business 
transactions, and other categories of income, as well as payments or other tax and banking 
information. SEOI are most often sent when a country receives information from another 
Member State that could in turn be relevant for another country, or because the sending 
Member  State  has  reasons  to  suspect  that  there  may  be  a  loss  of  tax  in  the  receiving 
Member States. Less often, SEOI are sent on the grounds of a tax break in one Member 
State possibly leading to increased tax liability in the receiving country, or on the detection 
of a cross-border business resulting in tax saving. 

Member  States  use  SEOI  also  to  exchange  information  on  cross-border  ATR/APA 
involving third-country jurisdictions, when the agreement does not permit the disclosure 
to third parties under DAC3 AEOI, provided that the international tax agreement under 
which it was  negotiated  permits its disclosure, and the competent  authority of the third 
country gives permission for the information to be disclosed.  

Overall, this type of information constitutes a negligible part of the exchanges under SEOI 
and are a fraction (8% on average) of the cross-border ATRs/APAs concerning only EU 
Member States, shared under DAC3 AEOI. 

3.1.4.4. Other forms of administrative cooperation 

3.1.4.4.1.  Presence in administrative office and participation in administrative enquires 

(PAOE) 

The Directive allows Member States to request either to be present in the offices where the 
hosting tax authorities carry out their duties (presence in administrative offices), or to be 
present during controls and checks carried out in the territory of the requested Member 

20 

 
State (presence in administrative enquiries), or both. The evidence collected suggests that, 
in most cases, Member States tend to combine the 2 aspects of a PAOE during the same 
visit.  

Over the 2018-2024 period a total of 222 PAOEs occurred. The number of PAOEs carried 
out  yearly  decreased  since  2018.  More  specifically,  the  figures  are  lower  starting  from 
2020, also reflecting the effect of COVID-19, which hindered the possibility to travel and 
to  be  present  in  offices,  and  digitalisation  (in  some  cases,  PAOEs  took  place  virtually 
because of the impossibility of in-person attendance). In the past 3 years, 10 Member States 
initiated a PAOE, leading to the participation of 20 Member States. 

3.1.4.4.2.  Simultaneous controls 

Over  2018-2024,  more  than  370  simultaneous  controls  were  initiated  (see  Figure  8 
below). During the period covered by the evaluation, the number of simultaneous controls 
carried out across the EU continuously increased since 2018, except for years 2020-2022, 
reflecting  an  overall  slowdown  of  audit  activities  and  international  cooperation  due  to 
COVID-19. As  the  use  of  this  instrument  requires  specific  resources  (trained  auditors, 
experts in cross-border tax issues, fluent in English) and procedures, Member States do not 
have the capacity to initiate large numbers of such audits. It is often concentrated in a few 
Member States: in the past 3 years, 15 Member States initiated at least one simultaneous 
control,  7  out  of  them  initiating  more  than  5.  In  total,  more  than  400  simultaneous 
controls  took  place,  with  very  significant  impacts  in  terms  of  tax  base  adjustments, 
representing several billion euros20, 60% of them addressing direct taxation topics, mainly 
transfer pricing issues. 

Figure 8: Number of simultaneous controls started and finished from 2018 to 2024 

Source: MLC platform, EU AIAC and European Community statistics  

3.1.4.4.3.  Requests for notification 

Article 13 of DAC provides Member States with the possibility to ask for assistance to the 
notification  of  tax-related  instruments  and  decisions  applying  to  taxpayers  located  in 

20  See chapter 4.1.1.3 on the benefits. 

21 

 
 
 
another Member State. Between 2018 and 2022 Member States sent between 230 and 340 
requests per year.  

3.1.5.  External recommendations and Commission’s responding initiatives 

In recent years, DAC has been assessed by the European Court of Auditors (ECA) and the 
European Parliament (EP). In particular, 

• 

• 

• 

In 2021, ECA published a special report on DAC21 following its audit of the EU’s tax 
information  exchange  system,  covering  the  period  from  2014  to  2019. The  report 
concluded that “the system for exchange of tax information has been well established, 
but more needs to be done in terms of monitoring, ensuring data quality and using 
the information received”. It highlighted that the information collected by Member 
States is often incomplete and inaccurate, partly due to the lack of audits or checks 
on reported data and reporting entities. Additionally, the report noted the absence of 
sufficient guidelines on data quality and usage, as well as a common framework for 
monitoring the system’s performance and achievements. 
Also in 2021, the EP issued a report on DAC22, followed by a legislative resolution23. 
While acknowledging limitations in the available evidence, the EP identified several 
shortcomings in the current framework. In particular, it noted that certain income and 
assets remain outside the scope of DAC and that the information provided by private 
operators  and  exchanged  by  Member  States  is  often  of  poor  quality.  The  EP 
welcomed  recent  amendments  that  expanded  DAC’s  scope  and  strengthened  its 
mechanisms, while emphasising the need for thorough implementation of existing 
rules, including those related to AML. 
In  2024,  the  ECA  assessed  the  measures  taken  by  the  EU  to  tackle  harmful  tax 
regimes and corporate tax avoidance24 and made several recommendations in relation 
to DAC6. The ECA suggested that the Commission (i) clarifies the EU legislative 
framework;  (ii)  develops  its  guidance  in  cooperation  with  Member  States;  (iii) 
assesses  the  need  for  possible  amendments  to  DAC6  based  on  the  results  of  the 
evaluation; (iv) improves the quality of DAC6 reports; (v) makes the data field for 
non-EU countries involved in cross-border arrangements mandatory in the reporting 
schema;  and  (vi)  updates  the  DAC6  central  directory  architecture  to  make  this 
information available to Member States for every arrangement concerned. The ECA 
stressed  also  that  the  Member  States  should  perform  risk  analysis  using  the  tax 

21  Special Report No 03/2021: Exchanging tax information in the EU: solid foundation, cracks in the 

implementation. 

22  Report on the implementation of the EU requirements for exchange of tax information: progress, 

lessons learnt and obstacles to overcome (2020/2046(INI)), Committee on Economic and Monetary 
Affairs, A9-0193/2021, 3.6.2021. 

23  European Parliament legislative resolution of 10 March 2021 on the proposal for a Council Directive 

amending Directive 2011/16/EU on administrative cooperation in the field of taxation 
(COM(2020)0314 – C9-0213/2020 – 2020/0148(CNS)). 

24  Special Report 27/2024: Combatting harmful tax regimes and corporate tax avoidance – The EU has 

established a first line of defence, but there are shortcomings in the way measures are implemented 
and monitored, November 2024. 

22 

 
 
information received while the Commission should encourage and support Member 
States  to  adopt  a  common  performance  monitoring  framework,  including 
performance  indicators  and  quantitative  targets,  to  measure  the  achievement  of 
specific  objectives  in  the  fight  against  harmful  tax  regimes  and  corporate  tax 
avoidance. The Commission endorsed the recommendations on DAC6, with limited 
reservations.25. 

3.1.5.1. Commission’s initiatives to address the ECA and EP reports 

Legislative proposals and outcome 

In  response  to  the  recommendations  of  ECA  and  the  EP,  the  Commission  adopted  the 
DAC8  proposal,  which  increased  the  number  of  mandatory  categories  of  income  to  be 
exchanged under DAC1 and expanded the scope of automatic exchange of advance cross-
border rulings to high net-worth individuals. It also made the inclusion of TIN mandatory 
for certain AEOI exchanges (namely DAC1 and DAC3) and empowered the Commission 
to  create  a  TIN  verification  tool.  Furthermore,  it  allowed  Member  States  to  use  the 
information received for other purposes than tax matters, i.e. customs duties, AML, and 
enforcement  of  international  sanctions.  It  also  included  2  provisions  of  principle 
supporting 2 recommendations targeted to the Member States: ensuring the effective use 
of data received from AEOI and monitoring the effectiveness (i.e. benefits) of DAC. The 
Directive was adopted by Council in October 2023.  

Non-legislative actions 

The Commission services also carried out supportive actions to assist Member States in 
meeting their respective recommendations.  

Fiscalis expert team on quality and use of data - VISDAC 

• 
The ambition of VISDAC was to identify best practices that can be shared across the EU 
and identify specific areas for improvement related to DAC1 to DAC4 for each Member 
State.  The  expert  team  undertook  visits  to  all  Member  States  and  engaged  in  in-depth 
dialogue with their respective tax authorities regarding their practices and procedures to 
ensure the highest quality of data to be exchanged and to ensure that the data received is 
effectively  used.  Based  on  the  outcome  of  the  visits,  the  expert  team  issued  specific 
recommendations  to  the  individual  Member  States  with  a  view  to  improving  internal 
processes regarding data quality and use. Furthermore, based on the information gathered 
from all Member States, the expert team produced a general report on best practices on the 
quality and use of data that is exchanged under DAC1 to DAC4. 
The Commission services highlighted areas that required improvements and produced a 
set of general recommendations for ensuring the highest quality of data and the use of the 
data exchanged under DAC1 to DAC4. 

25  Replies of the European Commission to the European Court of Auditors Special Report, November 

2024. 

23 

 
 
 
 
Technical support instrument (TSI) 

• 
DG REFORM presented a flagship Technical Support Instrument (TSI) in 2023. The scope 
of  the  project  covers  the  enhancement  of  DAC  data  quality,  data  usage  (including  risk 
analysis),  and  performance  monitoring.  The  support  consists  of  a  review  by  external 
consultants of national AEOI systems, including IT systems and data flows, identification 
and sharing of best practices, and delivery of recommendations for improvement.  
• 
The expert team26 developed a prototype IT tool to assist with the matching of data. The 
results of the group were presented to the Member States in June 2024. 
• 

Fiscalis  project  groups  on  DAC  performance  measurement  and  on  measuring  the 
impact of the DAC 

Fiscalis Expert team on Data analysis 

The  work  of  2  groups  led  to  the  development  of  a  set  of  metrics  to  better  estimate  the 
outcome  of  administrative  cooperation,  which  were  approved  by  the  heads  of  Member 
States’ tax administrations in  December 2024. Further guidance and instructions in  this 
respect was also provided to Member States in the various reporting tools, starting from 
the Yearly Assessment questionnaire. 

4.  EVALUATION FINDINGS (ANALYTICAL PART) 

The first evaluation of the Directive was based on a study published in 2019. While the 
findings  from  this  first  evaluation  were  largely  positive,  they  identified  the  need  for 
improvements  in  certain  areas.  These  areas  related  to  the  practices  concerning  the 
collection of information, the quality of information exchanged and the need to ensure the 
more effective use of administrative cooperation tools.  

The first evaluation of the Directive was also limited by the recent entry into force of the 
provisions concerning administrative cooperation and automatic exchange of information. 
Consequentially  the  findings  were  informed  by  the  limited  evidence  available  which 
included data from the initial exchanges.  

5  years  later  these  limitations  no  longer  apply,  and  the  situation  has  progressed 
considerably  with  new  dedicated  instruments  to  foster  administrative  cooperation  and 
advanced functional information systems to support the exchange of information. These 
advances have improved the overall functioning of the DAC. 

4.1. To what extent was the intervention successful and why? 

4.1.1. Effectiveness  

AEOI, which is the core instrument of administrative cooperation under the DAC, enables 
tax administrations to obtain information about income and capital earned in other Member 
States  by  taxpayers  who  are  resident  for  tax  purposes  in  their  territory  and,  therefore, 
subject  to  taxation  therein. The  increased  tax  transparency  which  results  from AEOI, 
increases the ability of Member States’ tax administrations to tackle cross-border tax fraud, 

26  Minutes WG ACDT, 51st Meeting – Virtual Meeting, 3rd March 2022,  

24 

 
 
evasion and avoidance, thereby contributing to safeguarding Member States’ tax bases 
and tax revenues and, overall, to the fairness of EU tax systems.  

The success of AEOI depends on the capacity of Member States’ tax administration to use 
the data received from other Member States to assess the taxes to be paid by the taxpayers 
concerned and, if necessary, make tax adjustments which result in an increased tax base or 
additional taxes assessed. This, in turns, depends on: (1) the usability of the information 
received (i.e. the capacity of the receiving Member States’ tax administrations to process 
the data in order to achieve the above-mentioned objectives) and (2) the ability to match 
it (i.e. the ability to link the data to the correct taxpayers). 

4.1.1.1. Usability of information  

The assessment of the usability of the information received by Member States requires an 
analysis  of  two  interconnected  factors:  (i)  timeliness  of  the  information  exchanged 
(timely  transmission/reception  of  the  information  ensures  that  information  is  available 
when needed for compliance and enforcement actions); (ii) completeness and quality of 
the  information  exchanged  (complete  and  good  quality  information  enable  accurate 
interpretation of the data received by tax administrations). 

Timeliness of information exchanged  

No major issues were identified regarding the timeliness of exchanges. However, in the 
context of DAC1, some Member States expressed their need to receive the information 
earlier in the year to facilitate the pre-population of tax returns. 

Completeness and quality of information exchanged  

As  regards  completeness,  DAC1  and  DAC2  exchanges  present  a  high  degree  of 
completeness, as the information exchanged includes granular data concerning the income 
or capital received and the identification information of the concerned person or entity. The 
only exception is the percentage rate of inclusion of the TIN (Tax Identification Number) 
of the receiving country in DAC1 exchanges. This remained low compared to the number 
of records exchanged (covering about  2% of the taxpayers concerned). Simultaneously, 
only 13 Member States carry out activities to verify that the TIN of the receiving country 
is correct27. 

For  DAC3  and  DAC4,  several  tax  authorities  reported  concerns  regarding  the 
completeness  of  the  information  exchanged.  These  concerns  relate  to  the  fact  that  the 
identification of the individual or entity concerned is inhibited by the non-reporting of the 
TIN. 

In addition, some Member States stated that the summary of the content of the advance 
cross-border ruling, or advance pricing arrangement is not sufficiently detailed to readily 
assess and use the information received. This specific issue has been the subject of work 

27  Yearly Assessment 2024 (year 2023) 

25 

 
 
initiated  by  the  Commission  services  in  2023  with  a  group  established  to  improve  the 
quality and content of the DAC3 summaries.  

Concerning DAC4, it was found that the completeness of the information may potentially 
be affected by Member States that do not carry out adequate compliance checks of local 
MNEs28. Simultaneously, the usability of the CbCR information is impacted by data quality 
issues related to missing, incorrect and inconsistent information,29 which emphasises the 
importance of regular data quality checks. 

Concerning DAC6, 22 out of 27 Member States have processes and procedures in place to 
assess the completeness  of disclosures  submitted by the intermediaries or the taxpayers 
concerned.  While  the  scope  of  these  processes  and  procedures  varies  across  Member 
States, more than 50% of Member States carry out validation checks on the reported TIN’s 
before  exchanging  information  to  the  central  directory.  However,  other  mandatory 
informational fields are not subject to such systematic assessment, which may affect the 
quality  and,  therefore,  the  usability  of  the  information  exchanged.  In  this  respect  the 
abstract summary of the cross-border reportable arrangement is affected by the absence of 
detailed  facts  and  a  mismatch  between  the  reported  hallmarks  and  the  content  of  the 
summary30. 

28  According to the Yearly Assessment 2023 shared with the Commission in 2024, 21 out of 27 Member 

States had instruments to assess whether they received all due reports from other jurisdictions, 
including other Member States and third country jurisdictions. 
29  In particular, following issues have been raised by tax authorities: 

missing information (particularly regarding the TIN); 
missing or unclear indication about or inconsistent use of currency; 
missing or unclear indication of the start and end date of the reporting period; 
notation mistakes (e.g. data included as thousands or millions instead of units; inconsistent use of 
negative sign); 
clerical mistakes (e.g. negative number of employees or share of capital). 
To address this issue, several Member States highlighted the need for an automatic validation of data 
(e.g. rejecting CbCRs if certain information is missing or if the formats do not correspond). It is 
however worth noting that modifications on the CbCR format must be channelled through an OECD 
format update. 

30  FPG037: Improving the use of DAC data. 

26 

 
 
Figure 9: Member States carrying out activities or automatised controls to verify that 
the following collected information is correct before such information is sent to DAC6 
central directory 

16
14
12
10
8
6
4
2
0

Tax identification
number (TIN)

Identification of
intermediaries

Identification of
taxpayers, including
their name, date
and place of birth
(in the case of an
individual)

Residence for tax
purposes

Persons that are
associated
enterprises to the
relevant taxpayer
(where appropriate)

Source: Yearly Assessment 2024 (data 2023) 

Furthermore,  the  completeness  of  the  information  reported  in  respect  of  cross-border 
arrangements with non-EU countries was raised as an issue by both the ECA31 and private 
stakeholders32. 

4.1.1.2. Use of information  

Data matching 

A  critical  element  of  AEOI  is  the  ability  of  the  tax  administration  that  receive  the 
information to match this information to the taxpayer(s) concerned in the national database 
and, therefore, to identify the taxpayer. This process, which is referred to as data matching 
is necessary to ensure that the data can be used for tax compliance purposes (Figure 10 
below). Income or capital that is likely to be subject to taxation in the Member State is 
systematically  used  by  almost  all  Member  States  for  DAC1  and  DAC2.  Some  of  these 
Member States apply specific processes or treatments before matching. Only 2 Member 
States do not have a systematic approach toward matching of DAC1 or 2 data. 

In  the  context  of  DAC4,  20  Member  States  systematically  match  information  received, 
while for DAC3 and DAC6, the approach is less systematic, however most of the Member 
States (15 to 16) process the data immediately, and match the taxpayers concerned.  

31  ECA special report 27/2024, recommendation 2: To maximise the benefits of the automatic exchange 
of DAC 6 information with other Member States, the Commission should make the data field for non-
EU countries involved in cross-border arrangements mandatory in the reporting schema (if needed by 
a legislative proposal). Moreover, the Commission should update the DAC 6 central directory 
architecture to make this information available to Member States for every arrangement concerned. 

32  See Annex XII - Targeted consultations with academics – tax lawyers, September 2024. 

27 

 
 
 
Figure 10: Processing the data received 

Source: Ramboll study and EC data 

This systematic matching has led to an overall improvement in taxpayer identification 
compared to the previous evaluation. The 2019 evaluation concluded that only 7 Member 
States were able to successfully match 80% or more of the DAC1 and DAC2 information 
received, with another 2 successfully matching 75 % of the information received.  

This evaluation concludes that in 2023, 17 Member States were able to successfully match 
80% or more of DAC1 information with the rate of unmatched information across Member 
States averaging between 15% to 20%. More specifically the matching rates for the DAC1 
categories  of  IP,  DF  and  PEN  is  estimated  at  85%  and  at  80%  for  the  other  income 
categories (LIP, IP)  

As  regards  DAC2,  18  Member  States  had  a  matching  rate  above  80%.  Simultaneously 
more than half of the Member States have an unmatched rate of 10% or less (see Figure 11 
and 12). 

Figure  11:  DAC1  (IE)  unmatching  rate  – 
2023 

Figure 12: DAC2 Unmatching rate – 2023 

Source:  European  Commission  –AEOI  yearly  assessment 
2023 

The overall unmatched rate has decreased over the evaluation period for both DAC 1 and 
DAC2. This trend is particularly relevant for DAC2, with the unmatched declining from 
15% to 8% over the period covered by the  evaluation (see Figure 13 below). However, 
wide variations exist between Member States. 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 13: DAC2 Unmatched data rate after automatic matching, fuzzy matching 
and manual matching 

13%

15%

10%

8%

16%

14%

12%

10%

8%

6%

4%

2%

0%

YA 2020

YA 2021

YA 2022

YA 2023

Source: European Commission – Annual report on AEOI yearly assessment 2023 

As regards DAC3 and DAC4, only 5% of reports remain unmatched. The matching rate 
for DAC3 is very high (95%), as many Member States (20) resort to manual matching on 
a case-by-case basis for the remaining data that could not be matched automatically. It is 
efficient  but  relatively  slow  and  time  consuming.  As  regards  DAC4,  two-thirds 
automatically match the reports to their databases33. 

The  data  available  for  DAC6  matching  rates  was  limited  to  19  Member  States  for  the 
period  until  31  December  2022.  However,  out  of  these  19  Member  States,  16  had  a 
matching rate of 90% or more, while further 3 had matching above 50%34. This trend was 
confirmed in 2023 by 17 Member States. 

Despite the deployment of extra IT resources, Member States still cite a lack of domestic 
resources to systematically process the information received, as one of the main reasons 
for the lack of a systematic approach to data matching. The second reason identified is the 
quality of the information received. 

Use of information after data matching 

Information may be used for the administration and enforcement of the domestic laws of 
the Member States concerning the taxes referred to in Article 2 of DAC.  

All  Member  States  use  AEOI  information  to  carry  out  assessments,  collections  and 
enforcements  of  direct  taxes.  Simultaneously, AEOI  information  also  supports  mutual 
assistance in the recovery of tax claims and duties and is used in connection with judicial 
proceedings such as tax evasion. 

While  this  evaluation  finds  that  not  all  Member  States  systematically  use  information 
received from all DAC’s, the systematic use of information has steadily improved as 
compared with the findings from the previous evaluation. In reply to the Commission’s 
questionnaire, 10 out of the 25 Member States that responded stated that they require more 

33  Source: Yearly Assessment 2024 (year 2023). 
34  Source: Yearly assessment questionnaire on the AEOI, year 2022, 15 April 2023. 

29 

 
 
 
personnel resources, while 6 stated that they require better IT tools to make improvements 
in the systematic use of the information35. 

The most common use of DAC data is for risk assessment and compliance interventions 
e.g. desk controls and tax audits, but DAC data could also be useful to promote voluntary 
tax compliance.  

Use of information received under DAC1 

DAC1 data (see Figure 14) is often compared directly with the taxpayer’s tax returns. This 
correlation  supports  actions  to  address  non-compliance  e.g.  tax  assessment,  audits,  and 
support voluntary compliance e.g. pre-population tax returns, awareness campaigns and 
reminder letters to taxpayers. 

Figure 14: Use of DAC1 data in the reporting period  – type of actions carried out 
(multiple answers possible) 

Risk assessment

23

23

20

17

21

Tax assessments (not as part of an audit)

15

17

General audit

Audit limited to specific categories of income / capital

Awareness campaigns

12

11

11

11

12

10

10

13

11

10

7

11

16

12

12

14

11

15

Notification to generate disclosure (within tax return or not)

9

10

9

7

10

Voluntary compliance programs

6

6

6

4

6

No use / no file received yet

3
1
0

9

3

Tax coding or estimation of future income

2
2

3

2
2

Prefilling tax return

2
2

3

2
2

Other use

2
1
1
1
2

DAC1 IE

DAC1 DF

DAC1 PEN

DAC1 LIP

DAC1 IP

Source: Ramboll study and EC data 

Use of information received under DAC2 

The use of DAC2 information (Figure 15) is relatively similar to DAC1, as it mainly targets 
individuals. General audits are carried out more often as the potential tax yields may be 
higher than DAC1, owing to the higher value of income and assets reported. Half of the 
Member States use compliance measures e.g. awareness campaigns and, reminder letters 
to support those taxpayers who have not yet met their obligations to declare income from 
financial accounts held abroad, as opposed to imposing sanctions immediately.  

35  Questionnaire to the Member States on the functioning of the Directive (2024). 

30 

 
 
 
Figure 15: Use of DAC2 data in the reporting period: actions carried out (multiple 
answers possible) 

Risk assessment
General audit
Tax assessments (not as part of an audit)
Audit limited to specific categories of income / capital
Awareness campaigns
Notification to generate disclosure (within tax return or not)
Voluntary compliance programs
Other use
Prefilling tax return
Tax coding or estimation of future income

Source: Ramboll study and EC data 

7

5

3

1

25

20

18

16

14

13

More  than  half  the  Member  States  also  use  DAC1  and  DAC2  data  for  tax  recovery 
purposes36. 

Use of information received under DAC3, DAC4 and DAC6 

DAC3, DAC4 and DAC6 data (Figure 16) is mainly used for risk assessment (21 Member 
States), and follow-up compliance actions i.e. tax audits, limited to specific issues (such as 
transfer  pricing)  or  general  audits.  DAC4  information  is  also  used  to  support  further 
enquiries into the DAC4 information is also used to support further enquiries into the MNE 
groups  transfer  pricing  arrangements  or  into  other  tax  matters  during  a  tax  audit  (15 
Member States). DAC4 information is also used for economic and statistical analysis (13 
Member States). 

Despite its relatively recent entry into force, DAC6 information is used by the majority of 
Member States. In January 2023, 21 Member States had already integrated DAC6 data into 
their  risk  assessment  process,  and  16  Member  States  were  using  the  data  received  for 
specific tax inspections or extended audits. 

36  Source: AEOI Yearly assessment 2023  

31 

 
 
 
Figure 16: Use of DAC3, DAC4, DAC6 data in the reporting period – type of actions 
carried out (multiple answers possible) 

Source: Ramboll study and EC data - Yearly assessment questionnaire on the AEOI (2023) 

Use of information on request and spontaneous exchange of information  

Following  the  initial  automatic  exchange  of  information  12  Member  States  report 
proactively engaging with other Member States on the country-by-country reports received 
or  on  information  made  available  in  the  DAC3  and  DAC6  central  directories.  These 
contacts involved specific requests for additional information and seeking clarifications on 
issues of interpretation and missing data points. In this context the provisions for exchange 
of information on request are systematically used by the Member States. 

The type of use varies according to the nature of the information requested with all Member 
States using this information to carry out the assessment, management or enforcement of 
direct taxes. Furthermore, it is apparent that this information is not only useful for direct 
taxation, but also for other forms of taxation, revenue collection, and judicial proceedings 
e.g. tax evasion. 

Figure 17: Use of information on request 

25

20

15

10

5

0

Assessment,
administration,
enforcement of
direct taxes (PIT,
CIT, others)

 Assessment,
administration,
enforcement of
indirect taxes
(VAT, others)

 Judicial and
administrative
proceedings
initiated as a
result of
infringements of
tax law

 Assessment and
enforcement of
other taxes and
duties in the
framework of
mutual assistance
for the recovery
of claims

 Assessment and
enforcement of
compulsory social
security
contributions

Source: Ramboll study and EC data 

32 

 
 
 
A  majority  of  Member  States  also  confirmed  the  usefulness  of  the  provisions  for 
spontaneous exchange of information. In this context, Member States noted that they had 
received very relevant information on specific cases including income from construction 
work; income from crypto-assets users, income from foreign virtual currency providers; 
and income earned from social media activities37. 

4.1.1.3. The deterrent effect of the DAC 
Several  factors  explain  the  deterrent  effect  of  the  DAC:  increased  transparency,  risk  of 
detection and risk to be subject to penalties. 

AEOI under DAC1 and DAC2 enable tax authorities to have access to data on income and 
assets held abroad, including foreign bank accounts and other financial assets, which were 
previously  hard  to  detect.  In  most  Member  States,  taxpayers  are  informed  by  their  tax 
administration that foreign income or assets are likely to be reported to the Member State 
where they are tax resident, thereby reducing the incentive to hide them. Knowing that tax 
authorities  can  cross-check  foreign  income  or  assets  with  domestic  tax  declarations 
encourages accurate reporting and increases voluntary tax compliance. 

The  reporting  of  certain  arrangements  that  may  be  tax  harmful  (under  DAC6)  or  the 
distribution  of  the  tax  paid  in  other  countries  (under  DAC4)  enhance  the  ability  of  the 
receiving  tax  administration  to  detect  possible  loopholes  or  aggressive  tax  planning 
situations. This is particularly true as far as DAC6 is concerned, as this Directive has an 
early  warning  effect,  as  tax  authorities  receive  timely  information  about  potentially 
harmful schemes, reducing secrecy on arrangements that may have been structured for tax 
avoidance purposes. Hence, the risk of detection by tax authorities and the possibility to 
be subject to tax audits, discourage the use of aggressive tax planning schemes. 

Moreover, the implementation of national provisions related to the transposition of DACs 
is accompanied by financial penalties that target both taxpayers and reporting entities. For 
example,  EU Member States have implemented  DAC2 into national  law, and failure to 
comply with the national provisions can result in fines for individuals who fail to provide 
accurate self-certification of tax residency, and fines for financial institutions that fail to 
report  or  misreport  account  information.  The  same  goes  true  for  intermediaries  and 
taxpayers  who  fail  to  comply  with  the  obligation  to  disclose  reportable  cross-border 
arrangements  under  DAC6. These  penalties  can  be  substantial38,  especially  if  the  non-
compliance is systemic or intentional, which has a strong deterrent effect.  

Member States, stakeholders, as well as academics, lawyers and economists agree on the 
deterrent  effect  of the DAC for DAC1, DAC2 and  to  a certain  extent  DAC6. Although 
difficult  to  measure  objectively,  it  appears  that  the  impact  has  been  very  important  for 
DAC2, and to a lesser extent DAC1. The rationale for this difference is that tax liabilities 
arising from DAC2 information are generally greater than those arising from DAC1. 

37  Questionnaire to the Member States on the functioning of the Directive (2024). 
38 For example, in the Netherlands, the sanction, where the reporting of a DAC6 arrangement is not timely, 
complete or correct, is a maximum penalty of EUR 870,000. 

33 

 
 
With regard to DAC1, the findings from the VISDAC Expert Team confirmed that when 
Member States informed taxpayers of the presence of AEOI information for example by 
pre-populating tax returns or by way of reminder campaigns (letters or emails), taxpayers 
tended  to  declare  their  foreign  income  more  spontaneously  in  subsequent  years39. 
Moreover, the targeted consultation40 with lawyers and the evidence gathered in the public 
consultation41 confirmed the deterrent effect of the AEOI as regards DAC2 and, to a lesser 
extent,  DAC6,  and  its  consequences  on  taxpayers  and  intermediaries.  In  particular,  the 
experts emphasised the effectiveness of DAC2 in disclosing financial assets abroad. These 
effects are considered persistent and well assimilated by taxpayers.  

With regard to DAC3, the main effect observed was a change in legislation on rulings in 
certain  Member  States  after  the  adoption  in  2015  (a  factor  already  mentioned  in  the 
previous evaluation). DAC4 was not intended to act as a deterrent, as the CbCR provides 
additional information to help tax authorities better understand transfer pricing structures 
without necessarily aiming to prevent the structures or related transactions. However, there 
are some scholars who stated that public CbCR has proven to have such a deterrent effect42. 

Experts  also  indicated  that  they  had  perceived  a  change  in  the  attitude  of  taxpayers 
regarding DAC6 arrangements. More specifically, it was confirmed that it had an impact 
on large companies, leading some of them to set up very elaborate systems of internal due 
diligence  given  the  broad  scope  of  the  Directive. To  ensure  consistent  reporting,  some 
intermediaries have also developed elaborate internal  guidelines, to  take  account  of the 
differences in application between Member States.  

4.1.1.4. Benefit analysis 

The increased tax transparency brough about by the exchange of information under DAC 
and the consequent increase of tax authorities’ ability to detect and fight cross-border tax 
fraud, evasion and avoidance contributes to safeguarding Member States’ tax revenues.  

In this respect, the actual benefits of the DAC can be measured in terms of: 

-  additional tax base i.e. increased source of taxable income, assets, or transactions 
that  are  brought  under  the  scope  of  taxation  by  the  tax  authority  receiving  the 
information under the DAC.   

-  additional tax assessed i.e. an increase in the amount of tax liability determined 
by a tax authority, typically due to a re-assessment of the tax base, as a consequence 
of the use of the data received under the DAC.  For personal or corporate taxes, 
reassessments may occur after tax audits or corrections. 

39  Expert team on DAC, visits in the Member States (2023-2024). 
40  Annex XII - Targeted consultation with Tax law academics, September 2024. 
41  Summary report available here: https://ec.europa.eu/info/law/better-regulation/have-your-
say/initiatives/13678-Cooperation-on-direct-taxation-evaluation/public-consultation_en. 

42  See Joshi, P., Outslay, E., Persson, A., Shevlin, T. and Venkat, A. (2020), Does Public Country-by-

Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from the European Banking 
Industry. Contemp Account Res, 37: 2357-2397 (https://doi.org/10.1111/1911-3846.12601); Müller, R., 
Voget, J. & Zental, J. The Effects of Mandatory Private Disclosure On Public Disclosure—Evidence 
from CbCR. Schmalenbach Journal of Business Research 76, 533–571 (2024), 
https://doi.org/10.1007/s41471-024-00194-2. 

34 

 
 
The estimate of benefits generated by DAC in terms of safeguarding Member States’ 
tax revenues are consistent over time. However, the quantitative estimation of such effects 
is subject to uncertainties.  

The method for calculating the benefits of information exchanges could be explained as 
follows:  for  records  related  to  DAC1  and  DAC2,  which  contain  potentially  taxable 
amounts (such as amounts of income or assets), it would be relevant to know the amount 
of  taxes  paid  by  taxpayers  or  the  tax  bases  modified  following  the  receipt  of  the 
information.  

With respect to the use of DAC3 and DAC6 information it is not possible to establish a 
direct causal relationship with additional taxes collected and the modification of the tax 
base. The rationale for this is that DAC3 and DAC6 information must first be analysed, 
and  thereafter  it  may  be  combined  with  other  relevant  information  for  the  purposes  of 
further investigations or audits by the tax authorities. As for data exchanged under DAC4, 
the  use  of  CbC  reports  is  limited  by  the  Directive43,  primarily  to  risk-assessments  for 
transfer pricing purposes. 

However, even if this analysis was systematic (which is not the case in all the Member 
States),  an  immediate  fiscal  benefit  could  not  always  be  identified.  Currently,  Member 
States  submit  an  annual  report  to  the  Commission’  services  that  estimates  the  benefits 
arising  from  the  use  of  DAC  information.  However,  not  all  Member  States  have  the 
capacity to trace and monitor the use of DAC data. Therefore, caution should be exercised 
in interpreting the following elements. 

For DAC1, DAC2 and non-AEOI, increasingly more Member States track and monitor the 
tax benefits derived from these instruments. Yet, in the absence of common, structured, 
fully integrated indicators, there is no independent and comparative means of verifying all 
the data submitted by Member States. Moreover, for DAC4, the main limitation concerns 
the fact that the estimates carried out are only based on public CbCR data, as no dedicated 
literature exists on private CbCR (DAC4). 

Overall benefits 

Taking these limitations into account, and based on 2021 – 2023 data, various scenarios 
have been established. The first is based on the strict use of the data available for the years 
concerned,  with  total  DAC  benefits  estimated  at  EUR  1,2  billion  per  year.  The  other 
scenarios  are  based  on  models44  that  allow  an  estimation  of  higher  benefits:  applying 

43  Information  communicated  between  Member  States  pursuant  to Article  8aa of  the  Directive  shall  be 
used for the purposes of assessing high-level transfer-pricing risks and other risks related to base erosion 
and profit shifting, including assessing the risk of non-compliance by members of the MNE Group with 
applicable transfer-pricing rules, and where appropriate for economic and statistical analysis. Transfer-
pricing  adjustments  by  the  tax  authorities  of  the  receiving  Member  State  shall  not  be  based  on  the 
information exchanged pursuant to Article 8aa. 

44  The methodology used to estimate tax benefits from automatic exchange of information, as well as non-
AEOI activities, includes validating and cleaning reported data through consistency checks and adjusting 
or excluding  outliers. It also involves assessing data  coverage across Member States using weighted 
economic  indicators  and  extrapolating  EU-wide  benefit  ranges  only  when  sufficient  coverage  is 

35 

 
 
 
extrapolations  and  taking  into  account  possible  variations  in  the  available  data  and  the 
random benefits of using certain instruments45, DAC benefits are estimated to fall within 
the range of EUR 5 – 10 billion, with a central estimate of EUR 6.8 billion per year46.  

While significant in absolute terms, this represents only about 0.3% of EU direct taxation 
revenue, or 0.1% of total EU tax revenue in 202147.  

Specifically, considering the central estimates, AEOI under DAC1 and DAC2 is estimated 
to generate around EUR 1.2 billion per year in EU tax benefits, while DAC4 is estimated 
to contribute to an additional EUR 5.6 billion per year in tax revenues. 

However, the situation in different Member States remains disparate with regard to how 
the data is used. The approach seems generally dictated by the capacity to integrate data 
with pre-existing systems for risk analysis. 

For  DAC3  and  DAC6,  the  Commission  services  could  only  examine  the  impacts  on 
taxpayers, as it is not possible to establish a causal link between the information received 
and tax revenues.  

It is also difficult to directly attribute a specific tax increase/additional tax assessed to the 
use  of  exchange  of  information  and/or  spontaneous  exchange  of  information.  This 
difficulty arises from the fact that this would require a disaggregating of the information 
from  domestic  sources  of  information  for  the  purposes  of  calculating  a  specific  tax 
increase/additional tax assessed. 

The importance of the impact of the use of other advanced cooperation instruments should 
also be stressed. These tools are coordinated and monitored by the Member States with the 
support of the Commission Fiscalis programme in particular by a community of experts 
(EU-AIAC), allowing reliable statistical evidence to be obtained. 

In this context it has been establish that the yield from simultaneous controls in the years 
2018 to 2023 was significant. The use of this instrument resulted in tax base adjustments 
amounting to more than EUR 5,5 billion and shifted profit of nearly EUR 100 million over 
that period48. 

achieved. However, the methodology acknowledges limitations in disaggregating results and estimating 
impacts for DAC3–DAC6 due to their indirect links with tax assessments. For more details, see Annex 
IV: Overview of benefits and costs, based on the study carried out for the evaluation of the DAC. 
45   E.g the use of simultaneous controls, which last an average of 18 months but may have an impact that 

exceeds tens of millions of euros for a single Member State 

46   The central estimate was chosen as the most plausible, given that Member States' use of data is constantly 
increasing and therefore tends to give rise to greater fiscal impacts. This is particularly true for DAC4 
data, the use of which is limited to risk assessment by the Directive and consequently requires a process 
lasting more than one year, involving risk analysis and the implementation of tax audits, followed by the 
establishment of new tax bases in the event of anomalies being identified, the consequences of which 
can amount to several hundred million euros in the case of transfer pricing adjustments. 

47  See 2021 data from DG TAXUD, Annual report on taxation and Eurostat. 
48  See Study for the Evaluation of the Directive 2011/16, 18 December 2023, Annex 2, pp. 60-61 

36 

 
 
Figure 18: Tax adjustments and shifted profit resulted from simultaneous audits from 
2018 to 2023 

Source: EU AIAC platform and EC statistics 

Benefits of automatic exchange of information per categories of DAC 

•  DAC1 and DAC2 

As the information exchanged under DAC1 and DAC2 are designed to link certain income 
or assets with a specific taxpayer., it is possible to establish a direct link between the use 
of  information  and  the  benefits  in  terms  of  increased  tax  revenues.  Findings  from  the 
VISDAC expert team and answers provided by Member States show that more and more 
tax  authorities  are  developing  monitoring  systems  to  this  purpose,  leading  to  better 
monitoring of this outcome. 

Some  Member  States  shared  voluntarily  with  the  Commission  information  on  the  tax 
benefits generated by DAC1 and DAC2 over the period 2018-2023. Benefits are estimated 
as additional tax assessed or additional tax base. For DAC1, estimates of tax benefits 
were provided by 8 Member States in 2021, 11 Member States in 2022 and 12 in 2023. For 
DAC2, about half of the Member States provided estimates for 2021, 18 Member States 
for 2022 and 17 for 2023.  

Figure 19 shows the reported tax benefits in terms of additional tax assessed, for both 
DAC1 and DAC2. For DAC1, reported tax benefits  reached about  EUR 150 million in 
2021, due to the higher data coverage. In 2022, they are estimated at about EUR 50 million; 
data for previous years are lower, around EUR 10 million. Additional taxes assessed for 
DAC2 are higher compared to DAC1. This is in line with the qualitative insights from the 
questionnaire and the targeted consultation. While in 2018 and 2019 the additional taxes 
assessed were worth about EUR 40 million, this figure increased to more than EUR 200 
million in 2020, up to EUR 340 million in 2021 and more than EUR 680 million in 2022.  

37 

 
 
Figure  19:  Reported  tax  benefits  from  DAC1  and  DAC2,  additional  tax  assessed 
(EUR million) 

Source: Ramboll study and DG TAXUD data 

Tax benefits in terms of additional tax base are shown in Figure 20 below. A lower number 
of Member States, accounting for a significantly smaller part of the sample, could report 
this data. Hence, estimation of potential benefits at EU level is difficult to be provided. 

Figure 20: Reported tax benefits from DAC1 and DAC2, additional tax base (EUR 
million) 

Source: Ramboll study and DG TAXUD data 

Data submitted by Member States for 2023 confirms the benefits of automatic exchanges 
of  data  on  income  and  assets  provided  for  in  DAC1  and  DAC2,  with  Member  States 
reporting additional revenues of 522 million EUR in tax base assessed and 273.5 million 
EUR in tax assessed49. 

Based  on  the  data  reported  by  Member  States,  estimated  EU  tax  benefits  have  been 
extrapolated: the simulation is what total benefits would be with a consistent use of the 
data across the Member States. Estimated EU tax benefits are robust for 2021 and 2022, 
when the data cover a considerable share of the EU. For DAC1, EU benefits would amount 
to  about  EUR  200  -  400  million.  For  DAC2,  estimated  EU  tax  benefits  have  grown 
significantly in the last two to three years. These are estimated at about EUR 700 million 
in 2021 and about EUR 1,100 million in 2022. For the previous years, potential benefits 
are significantly lower, in the EUR 40 – 130 million range for 2018 and 2019. The increase 
is likely to reflect a better recording of benefit data, as well an increase in the use of DAC2 
for enforcement actions. 

49  Sample of 17 Member States responding to the Yearly Assessment 2024 (data 2023). 

38 

20182019202020212022DAC1861114853DAC23541223338683DAC10.1 – 40.01 – 20.01 – 30.01 – 620.3 – 62DAC20.01 – 180.1 – 220.01 – 1830.01 – 3170.1 – 420DAC1767811DAC26913918DAC116%11%27%38%27%DAC226%34%41%48%64%Min-Max at national levelReporting Member StatesSample coverage20182019202020212022DAC1116490778833318DAC274113416288DAC143656DAC245455DAC17%7%7%23%16%DAC212%27%8%16%15%Reporting Member StatesSample coverage 
 
 
 
•  DAC3 and DAC4 

As explained before, there is no specific data from tax authorities on additional tax base or 
additional tax assessed from DAC3 and DAC4 as the information which is shared under 
DAC3 and DAC4 does not provide amounts with are directly subject to taxation. 

The Intra-European Organisation of Tax Administrations (IOTA) made an assessment the 
possible benefits from AEOI of cross-border tax rulings and advance pricing agreements 
(subject to DAC3 obligations), that could be measured by the high-risk transactions and 
schemes  identified,  and  by  the  amount  of  additional  taxes  identified  or  collected  on 
auditing such transactions. The outcome of this assessment was relatively limited, as only 
one  of  the  countries  participating  to  the  assessment  could  provide  estimates  on  the 
additional taxes assessed.  

Tax  benefits  of  Country-by-Country  reporting  have  been  documented  in  the  literature 
which has focused on both public CbCR50 and CbCR between tax administrations (which 
is covered by DAC4).51 

•  On the period subject to the evaluation, the available economic analysis mostly focuses 
on banks, and for which a longer data series on the impacts of public CbCR exists: 

•  Overesch and Wolff52 show that the effective tax rates increased for EU banks subject 
to public CbCR compared to domestic EU banks outside the scope of the obligation and 
their US peers. Taxes paid by banks subject to CbCR increased from 28.3% to 31.2% of 
their  profits  (+2.9  p.p.). The  tax  increasing  was  even  more  for  banks  with  higher-than-
average activities in tax havens (+3.7 p.p.). 

Joshi et al.53 demonstrate that CbCR reduces profit shifting, i.e. the amount of profits 
• 
allocated to foreign low-tax jurisdictions. At the same time, the effective tax rate borne by 
banks  covered  by  this  obligation  did  not  increase,  possibly  because  other  tax  evasion 
strategies  escape  CbCR  scrutiny.  Hence,  albeit  total  tax  burden  remains  similar,  tax 
revenues  shift  towards  high-tax  jurisdictions.  The  numerical  estimates  suggest  that  a 
standard  (inter-quartile)  improvement  of  disclosure  decreases  profits  in  low-cost 
jurisdictions by 12.8%. 

50   Under public disclosure, both tax authorities and the public at large are better informed about taxes 

paid across jurisdictions, as MNEs make their CbCRs available in the public domain. Over the period 
of the evaluation, this was only required for extractive industries and large banks in the EU. As of 
2025, other MNEs are subject to public disclosure rules. Under public CbCR, MNEs thus face both 
possible enforcement actions and reputational effects. 

51   Under private disclosure (i.e. non-public, only to tax authorities and exchanged between relevant tax 
authorities), as provided by DAC4, CbCRs are directly transmitted to the tax authority of the Member 
State  of  main  establishment.  The  tax  authority  then  share  the  report  to  the  other  Member  States 
concerned. This may lead to further investigations and possible tax audits and reassessments, depending 
on the result of risk analysis and administrative enquiries. 

52  Michael Overesch, Hubertus Wolff: Financial Transparency to the Rescue: Effects of Public Country-

by-Country Reporting in the European Union Banking Sector on Tax Avoidance, 
https://doi.org/10.1111/1911-3846.12669. 

53   Preetika Joshi, Edmund Outslay, Anh Persson, Does Public Country-by-Country Reporting Deter Tax 

Avoidance and Income Shifting? Evidence from the European Banking Industry, 
https://doi.org/10.1111/1911-3846.12601. 

39 

 
 
To estimate the impacts of DAC4, which concern all EU MNEs, the analysis expands, with 
some caveats, on the results from Overesch and Wolff. Here, the major concern is that – 
unlike large banks and few other companies – most MNEs are subject to private, not public, 
CbCR. Hence, impacts are likely smaller. Three scenarios are considered: in the central 
scenario, the effects of private CbCR are one third of those estimated for public CbCR; 
sensitivity values are set at half and one quarter. This means that the effective tax rate is 
expected to increase by 1.0% (range: 0.7 – 1.5%). Considering the yearly profits generated 
by EU MNEs in domestic jurisdictions (EUR 585 billion), and under the assumption the 
increase in the effective tax rates is homogeneous across jurisdictions, the effect of CbCR 
can be estimated in a range of EUR 4.2 – 8.5 billion (central estimate at 5.6 billion). In 
relative terms, the changes are a fraction of existing revenues, representing 1.2% of current 
revenues from corporate income taxes, and 0.1% of total tax revenue in the EU.  

The absolute figures are important, as it is related to the large number of profits generated 
by EU MNEs domestically. As a consequence, even a limited change in the effective tax 
rate results in a large impact on revenues. 

4.1.2. Efficiency 

The analysis of efficiency examines the costs associated with the DAC, as reported by tax 
authorities, private stakeholders, and the academic literature.  

4.1.2.1. Cost analysis 

The  cost  analysis  provides  an  overview  of  the  costs  associated  with  implementing  and 
maintaining the functioning of the DAC both for the private sector and tax authorities. The 
costs considered in this analysis include annual recurring adjustment costs related to IT 
systems and administrative burdens due to periodic reporting, which affect both public 
and  private  stakeholders  such  as  reporting  financial  institutions,  intermediaries  and 
companies  planning  cross-border  tax  arrangements,  and  MNEs  subject  to  CbCR 
obligations. Set-up costs are excluded54. 

This  analysis  is  complicated  by  the  lack  of  objective  traceability  on  the  part  of  private 
stakeholders55 surveyed, both in the study and in the public consultation, and the relatively 
imprecise information obtained. As a result, the report is essentially based on the findings 
of the study commissioned by DG TAXUD56, which cannot be corroborated by other work 
or data made available to the Commission services. Nevertheless, tax authorities are best 
placed to identify spending on investments to establish new exchanges (e.g. DAC6), and 
those relating to the operational costs of current exchanges.  

54  In particular, the cost-benefits comparison is based on the following principles: (i) the scope of costs 
and benefits is homogeneous, i.e. the costs of the various DAC provisions are considered only when 
the benefits could be quantified; (ii) recurring burdens are compared to recurring benefits, excluding 
set-up costs. 

55  In particular, financial institutions as regards DAC2 and MNEs (turnover > €750 million) concerning 

DAC4. 

56  See: Ramboll study, Volume 2 – Annexes, 9-4 Costs for private stakeholders. 

40 

 
 
 
 
4.1.2.2. Implementation costs 
Based on the external study findings for the period from 2018 to 2022, annual recurring 
adjustment costs and administrative cost from DAC are estimated at approximately 
EUR  646  million  for  all  concerned  stakeholders  (i.e.  private  stakeholders  and  tax 
authorities). 

Figure 21: Implementation costs 

Costs 

AEOI  adjustments costs for tax authorities 

Non-AEOI adjustment costs for tax authorities 

•  EOIR 

•  PAOEs and SCs 

Reporting administrative burdens for tax 
authorities 
Total costs for tax authorities 

Administrative costs  (DAC2) for private 
stakeholders 
Administrative costs  (DAC4) for private 
stakeholders 
Total administrative costs  for private 
stakeholders 
Total costs 

Source: Ramboll study and DG TAXUD data 

4.3 

0.6 

Total 

37 

4,9 

0.1 

42 

550 

54 

604 

646 

A  large  part  of  the  administrative  costs  (EUR  604  million  per  year)  accrues  to  private 
stakeholders who are subject to reporting obligations, i.e. financial institutions subject to 
DAC2, MNEs subject to DAC4, intermediaries and taxpayers reporting under DAC6. 91% 
of the recurring expense is linked to the collection of DAC2 data (EUR 550 million), which 
in 2023 would correspond to around EUR 12 per account declared under DAC257. 

The costs borne by  tax authorities amount to about EUR 42 million per year, the greater 
part of which is linked to AEOI￼58 This amount covers two types of costs: (1) adjustment 
costs linked to the operation of IT systems for AEOI and non-AEOI activities, as well as 
(2) administrative burden stemming from the  periodical reporting obligations. It should 
be noted that the period from 2018 to 2023 was marked by significant one-off costs for 
setting-up  the  IT  systems  to  enable  the  collection  and  use  of  DAC4  and  DAC6  data. 

57  The methodology used in the study combines targeted surveys and interviews with financial institutions 
and federations to gather quantitative and qualitative data on  administrative burdens from DAC2 and 
DAC4. For DAC2, data from 18 entities—including large and small institutions across six EU Member 
States—were used to estimate onboarding time, set-up, and ongoing costs, monetised using Eurostat 
wage statistics. For DAC4, input from 11 entities (including MNEs and federations) helped assess cost 
categories  like  IT,  consultancy,  and  training,  with  segmentation  by  company  size  and  complexity  to 
reflect varying compliance efforts. See more details on methodology applied in Annex IV: Overview of 
benefits and costs. 

58  The estimate of burdens on public authorities should be considered as very robust, since all or nearly 

all Member States are able to provide detailed estimates of these costs. As for private stakeholders, 
data originate from dedicated interviews and surveys; however, for certain DACs, the number of 
interviewees is limited, at about 10 to 15 entities. 

41 

 
 
Moreover, recurring costs for DAC1 and DAC2 increased due to the increase in the volume 
of data exchanged. 

More specifically, DAC1 and DAC2 generated the highest costs for tax authorities59. Tax 
authorities  acknowledge  that  the  set-up  costs  are  significant  when  new  DACs  are 
introduced but then decrease significantly and stabilise over time, while recurring costs 
tend to increase60. This confirms the finding of the previous evaluation.  

This increase in recurring costs over time is in line with the increasing use of information 
for risk analysis, tax determinations, or other compliance purposes. Recurring costs tend 
to stabilise in a narrow range (e.g. EUR 10-12 million for DAC2, EUR 7-10 million for 
DAC1); yearly variations may be due to national factors, such as changes in the number of 
resources dedicated to DAC, special campaigns or enforcement actions.  

The costs associated with non-AEOI provisions are relatively low for the Member States, 
amounting  to  around  EUR  1  million  per  year,  insofar  as  the  resources  necessary  to 
exchange information do not require significant IT infrastructure. Exchanges on request 
and  spontaneous  exchanges  are  carried  out  using  a  dedicated  “CCN-mail”  messaging 
system, the costs of which are partially covered by the FISCALIS budget and are included 
in the DAC1 costs in Figure 19 below.  

It should be stressed indeed that the Commission provides the IT infrastructure necessary 
to ensure the exchange of information via the Common Communication Network (CCN). 
The CCN is a secure, private network information channel between national customs and 
tax  authorities  within  the  EU.  For  example,  exchange  of  information  on  request  and 
spontaneous exchange of information are exchanged via CCN/Mail, while DAC1, DAC2 
and DAC4 data are exchanged via CCN/CSI. DAC3 and DAC6 are supported by CCN-
based  central  directories.  Regarding  the  costs,  the  Commission  covers  the  central 
infrastructure costs of the CCN via the FISCALIS budget (Figure 9 below), while Member 
States are responsible for their own connection and operational costs61. 

Figure 22: Financing of Fiscalis IT systems (2014-2020) 

DAC 

DAC1 
DAC2 
DAC3 
DAC4 
DAC6 

Total development cost for the 
Fiscalis 2020 Programme 
EUR 436,000 
EUR 587,000 
EUR 715,000 
EUR 300,000 
EUR 1,146,000 

59  According to the Yearly Assessment survey of 2024, the overall estimated recurring costs for AEOI 

were below EUR 30 million. 

60  During the targeted consultation in the context of the Study, 20 out of 23 tax authorities agreed or 

partly agreed to the following statement: “for each DAC, significant costs are incurred for 
implementation and set-up, then total costs decrease in the subsequent years”. 

61  In 2023, 89% of the Fiscalis program budget was allocated to the development and operation of the 

common components of the European electronic systems, which includes the Common 
Communication Network (CCN). 

42 

 
 
Source: Data provided by DG TAXUD in the context of the Study on the final evaluation of the Fiscalis 
2020 programme 

Finally, costs for reporting by Member States to the Commission are in the range of EUR 
140,000 per year, half of these costs relate to the compilation of the data necessary for the 
Yearly Assessment survey. 

Effects of differences in implementation 

With  respect  to  DAC6  the  results  from  the  public  consultation,  and  the  consultation  of 
professional organisations in the framework of the Platform for Tax Good Governance62 
showed  that  there  are  some  concerns  with  respect  to  the  costs  of  reporting  for 
intermediaries and taxpayers. 

In particular, tax law experts and businesses highlighted the differences across Member 
States  in  the  interpretation  of  the  hallmarks,  which  increases  the  compliance  costs  and 
creates an unnecessary administrative burden. While it was not possible to precisely assess 
the  costs  generated  by  these  differences,  some  respondents  to  the  public  consultation 
indicated  that  the  cost  of  analysing  a  transaction  potentially  subject  to  reporting  under 
DAC6 could exceed the amount of the transaction itself, creating an obvious cost/benefit 
distortion from the perspective of the taxpayers involved. 

4.1.2.3. Costs vs benefits 

According  to  the  cost-benefit  analysis,  the  recurring  burdens  due  to  DAC  are 
commensurate with the benefits generated.  

Under various sensitivity scenarios, annual net benefits range between EUR 500 million 
and 6.1 billion63.  

Net benefits remain positive and significant even when considering the uncertainties linked 
to the quantification of benefits deriving from the impact of DAC3 and DAC4. However, 
DAC4 economic literature64 indicates that Public CbCR has the potential to increase the 
effective tax rate for MNEs and reduce profit shifting. 

Even under the most conservative estimates, which are based on primary tax benefits data 
provided by a growing number of Member States, the benefits from the DAC are estimated 
at between 8 to 10 times more than the costs incurred65. 

62  Please consult Annex V for further details. 
63   See Fig. 23 and more details on methodology applied in Annex IV: Overview of benefits and costs.  
64  See Overesch M. and H. Wolff, Financial Transparency to the Rescue: Effects of Country-by-Country 

Reporting in the EU Banking Sector on Tax Avoidance Contemporary Accounting Research, Vol. 38 
No. 3, Fall 2021; Joshi P., Outslay E. and A. Personn, Does Public Country-by-Country Reporting 
Deter Tax Avoidance and Income Shifting? Evidence from the European Banking Industry, 
Contemporary Accounting Research, Vol. 37 No. 4, Winter 2020. 

65   The low-range scenario shows net benefits of around €4.2 billion and a cost-effectiveness ratio close to 
8. The comprehensive scenario indicates that the net benefits amount approximately 6.1 billion, with a 
high  cost-effectiveness  ratio  of  10.  See  fig.  23.  and  details  on  methodology  applied  in Annex  IV: 
Overview of benefits and costs. 

43 

 
 
Figure 23: Costs vs benefits 

Scenario 

Costs 
(€mln) 

Benefits 
(€mln) 

Net 
(Benefits 
– Costs) 

Cost-Effectiveness Ratio 
(Benefits/Costs) 

Comprehensive scenario 
Low-range scenario 
Data-based scenario 
Source: Ramboll study based on Member States and DG TAXUD data 

6780 
4940 
1180 

650 
650 
650 

6130 
4290 
530 

10,43 
7,60 
1,82 

However, certain factors raised by stakeholders must be considered even if it is not possible 
to assess their impact on the cost/benefit ratio. 

First, the frequency of DAC amendments has been significant, expanding the scope of the 
Directive almost yearly, and recent provisions may not yet have reached their full expected 
impact. This has also resulted in the creation of a lengthy text with several annexes and 
frequently  updated  implementing  acts.  This  increases  complexity  and  makes  it  more 
difficult to understand the legal framework. The results of the consultations conducted with 
both tax authorities and the business sector confirm that the evolving legal framework is 
increasingly complicating the implementation for public and private stakeholders.  

The  time  left  for  implementation  after  the  adoption  of  DAC  amendments  is  often 
considered  by  stakeholders  to  be  too  short.  This  increases  pressure  on  both  tax 
administrations and private stakeholders. This assessment is supported by the fact that most 
DAC-related infringement procedures relate to delays in implementation.  

Moreover, the evolution of the DAC has led to a significant increase in information systems 
developments, increasing the costs of implementing and operating those systems, and the 
associated human resources required for their design and maintenance. This applies to the 
public sector as well as private stakeholders. In particular, some comments received during 
the  public  consultation  from  the  financial  sector  identified  the  verification  of  the  Tax 
Identification  Numbers  (TINs)  in  DAC2  exchanges,  as  an  area  for  improvement.  In 
particular, it was suggested to improve technical interoperability by investing in IT systems 
to reduce administrative burdens. 

4.1.3. Coherence 

The Directive is coherent with various EU and non-EU legal provisions. 

4.1.3.1. Coherence with international initiatives 

The  degree  of  coherence  of  DAC  provisions  is  high.  In  many  cases,  DAC  provisions 
directly  incorporate  definitions  and  operational  processes  from  OECD  initiatives  (e.g., 
XML schemas). Notable examples include DAC2 / Common Reporting Standard (CRS); 
DAC4 / BEPS Action 13 and CbCR; DAC7 / Model Reporting Rules for Digital Platforms 
(MRDP);  and  DAC8  /  Crypto-Asset  Reporting  Framework  (CARF).  However,  this 
alignment is not uniform. For example, DAC3 and DAC6 diverge from OECD framework 
or  recommendations  (BEPS  5  minimum  standard  is  based  on  spontaneous  information 
while  DAC3  is AEOI;  MDR  report  covers  a  limited  range  of  reportable  arrangements, 
while DAC6 hallmarks have a broader scope). 

44 

 
A number of contributions to the open public consultation66 refer to the issue of coherence 
of the DAC with the international tax framework. In particular, 2 initiatives were cited: the 
US Foreign Account Tax Compliance Act (FATCA) and OECD Pillar 2. In this respect, 2 
stakeholders argued for clearer self-certification procedures and better alignment between 
FATCA and DAC2 classifications. They argue that these elements would streamline the 
reporting obligations and improve the overall efficiency of tax compliance frameworks.  

8 associations representing both tax advisors and businesses mentioned the need to enhance 
synergies among OECD Pillar II and DAC4 and simplify the reporting requirements under 
the latter. This would avoid duplication of effort and significantly reduce compliance costs. 
5  of  them  mentioned  the  OECD  temporary  CbCR  Safe  Harbour  as  a  possible  common 
ground as it would involve less extensive calculations based on a smaller pool of already 
available data from the CbCR report.  

4.1.3.2. Coherence with EU acquis 

There  is  a  notable  coherence  with  other  relevant  EU  initiatives  particularly  those  with 
similar instruments for administrative cooperation in different tax areas (e.g., VAT, excise, 
asset recovery). However, small inconsistencies exist, mostly stemming from the differing 
objectives pursued by other EU Directives, such as the AML Directive (AMLD) and the 
Anti-Tax  Avoidance  Directive  (ATAD).  Nevertheless,  significant  synergies  have  been 
identified, such as those between DAC2 and the AMLD.  

With regard to other EU legislation stakeholders participating in the public consultations 
highlighted that the use of consistent definitions across different pieces of EU legislation 
(e.g.,  ATAD,  VAT  administrative  cooperation  regulation,  and  the  Recovery  Directive) 
would  greatly  enhance  clarity  and  efficiency.  One  example  mentioned  was  the  DAC6 
hallmark B2 covering inter alia hybrid instruments, addressed also by ATAD.  

Furthermore,  5  associations  and  business  communities  representing  the  banking  and 
financial sector stressed the need for greater coherence between DAC6 obligations and the 
AMLD. With regard to the latter, one stakeholder argued that while the AMLD prohibits 
the  disclosure  of  information  to  customers  in  cases  of  suspicion,  DAC6  requires  the 
exchange  of  information  on  tax  arrangements  potentially  used  to  circumvent  automatic 
exchange of information. 

4.1.3.3. National implementation 

Several private stakeholders raised the issue of the different implementation of the DAC 
across Member States. Differences in implementation may be linked to various factors. In 
some  cases,  the  EU  framework  is  adapted  to  domestic  constraints,  which  may  lead  to 
slightly divergent approaches for example, this is the case with the concept of legal and 
professional privilege in DAC6. 

66  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13678-Cooperation-on-direct-

taxation-evaluation/public-consultation_en. 

45 

 
 
Similarly,  while  the  broad  scope  of  DAC6  and  certain  definitions  therein  does  not 
fundamentally  conflict  with  the  principles  of  legal  certainty  and  legality  in  criminal 
matters, as noted by the CJEU, it may lead to differences in interpretation. Consequentially 
this results in a more complex application, which ultimately increases the administrative 
burden. 

Overall, the issue raised by private stakeholders concerning the different implementation 
of the DAC across Member States in many cases seems to reflect more a need for clearer 
and common guidance on the interpretation of DAC provisions rather than a fundamental 
problem of coherence.  

Another  area  where  divergences  have  been  identified  by  several  stakeholders  concerns 
penalties imposed on intermediaries for non-reporting, incomplete reporting or incorrect 
reporting in respect of DAC2, DAC4 and DAC6. According to the findings of the study, 
criticism  has  been  raised  by  stakeholders  on  the  differing  levels  of  proportionality  of 
penalties in some Member States. In relation to DAC6, the variation of penalties adopted 
by Member States are perceived by tax advisors as affecting the level-playing field within 
the EU. Overall, the study concluded that penalties related to the non-reporting, incorrect 
and incomplete reporting under DAC6 have been rarely or never applied. 

The impact assessment for the DAC8 proposal as well as the 2021 ECA report confirmed 
that  there  were  significant  differences  in  the  levels  and  range  of  penalties  that  may  be 
applied by Member States. This disparity may then affect to a greater or lesser extent, the 
effectiveness and efficiency of compliance with the rules of the DAC. The VISDAC project 
also confirmed these findings in that only a limited number of Member States have applied 
penalties in practice, with most Member States applying few penalties or having not yet 
applied  penalties.  VISDAC  found  that  only  10  Member  States  have  applied  penalties 
related  to  DAC2  while  17  either  did  not  or  could  not  confirm  that  they  have  applied 
penalties.  For  DAC4  3 Member  States  had  applied  penalties  while  24  either  did  not  or 
could not confirm whether they had applied penalties.  

For some Member States it should be considered that there are comprehensive cooperative 
compliance measures in place that for the most part target the MNEs that are subject to 
DAC4. This would have the effect of reducing the number of cases where penalties are 
applied. 

4.1.3.4. Common administrative guidance 

According  to  the  2023  Yearly Assessment  24  Member  States  published  administrative 
guidance  on  DAC6,  to  support  intermediaries  and  taxpayers  in  complying  with  their 
reporting requirements. 18 Member States provided administrative guidance for assessing 
arrangements in accordance with the hallmark criteria in Annex IV. 

There is no common administrative guidance for DAC1, DAC3 or DAC6. With respect to 
DAC2 and DAC4, the OECD has published guidelines for the equivalent CRS and CbCR. 
The absence of common administrative guidance was highlighted by the  ECA audit on 
harmful  tax  regimes  and  is  the  subject  of  one  of  its  recommendations.  Member  States 
raised the same point and stressed that efficiency would be enhanced if tax authorities had 

46 

 
common guidance, which would also be available to intermediaries and taxpayers. This is 
somehow contradictory with the conclusions reached by Member States at the end of the 
3 Fiscalis workshops  held  in  2020 and 202167 which focused on the implementation of 
DAC6 across the different Member States. On that occasion Member States concluded that 
the  content  of  the  final  reports  should  not  be  taken  as  binding  interpretations  of  the 
Directive and not be published.  

4.2.  How  did  the  EU  intervention  make  a  difference  and  to  whom  (EU  added 

value)? 

The EU, through the DAC, has been a frontrunner in adopting measures to increase tax 
transparency  and  tackle  tax  fraud,  evasion  and  avoidance,  including  by  implementing 
standards that have been developed at international level but not yet globally applied. 

All EU tax authorities agree that DAC adds value compared to international, bilateral, or 
national solutions in terms of efficiency gains and additional benefits. The main efficiency 
gains stem from the fact that the DAC ensure that information is exchanged in line with 
EU rules on data protection, from the binding nature of DAC under EU law, its underlying 
IT  architecture,  and  the  uniform  reporting  and  exchange  requirements  across  the  EU, 
notably when implementing standards agreed at international level.  

Firstly,  the  DAC  provides  a  solid  legal  framework  that  facilitates  comprehensive  data 
sharing among all Member States, in a way that is fully aligned with the provisions of the 
General  Data  Protection  Regulation  (GDPR).  Secondly,  by  providing  for  mandatory 
automatic exchange of information (in addition to exchange of information on request and 
spontaneous  exchange  of  information),  the  DAC  ensures  that  all  Member  States  have 
access to critical tax information. The increased tax transparency which results from AEOI 
significantly  reduces  opportunities  for  tax  fraud,  tax  evasion  as  well  as  tax  avoidance 
strategies  that  exploit  disparities  between  national  tax  systems  and  contributes  to  the 
fairness of EU tax systems. Thirdly, the common IT infrastructures established under the 
DAC  and  financed  through  the  Fiscalis  programme  streamline  the  exchange  processes, 
reducing  administrative  burdens,  costs  and  inefficiencies  associated  with  bilateral 
agreements.  

This  setup  also  strengthens  mutual  trust  and  cooperation  between  tax  authorities.  The 
significance of EU funding in supporting the set-up of the IT infrastructure and resource-
intensive forms of administrative cooperation (e.g., PAOE and simultaneous controls) has 
been highlighted by all tax administrations. Additional benefits vary and are higher for the 
provisions  without  an  equivalent  at  the  OECD  level,  such  as  DAC1,  non-AEOI 
instruments, and, to some extent, DAC6. Finally, in relation to international standards, the 
DAC ensures a coordinated approach to implementation and application which is crucial 
to safeguarding the functioning of the Internal Market. 

67  Fiscalis Workshop ‘DAC6 implementation differences’ FWS/153/001-003, 26 July 2021, Fiscalis 

Workshop ‘DAC6 implementation differences, part two’, FWS/153/004-005, 2-4 and 9 March 2021, 
Fiscalis 2021 Digital Workshop ‘DAC 6 implementation differences, part three’ FWS/153/006-007 24, 
25 and 29 November 2021. 

47 

 
 
This  last aspect  is  also very relevant  and has been highlighted  by  private stakeholders. 
From  their  perspective  the  DAC  usually  provides  added  value  by  avoiding  the  costs 
associated  with  a  potential  fragmentated  implementation  of  the  standards  developed  at 
international level which would result in a variety of reporting requirements across the EU. 
Thanks  to  the  DAC,  financial  institutions  and  intermediaries  operating  in  several  EU 
Member States as well as MNEs covered by DAC4, benefit from a single set of reporting 
requirements, including standardised technical specifications. This eliminates the need to 
adapt to different local implementations and prevents unnecessary duplicate costs related 
to tailoring IT systems, data collection, and reporting procedures, thereby contributing the 
smooth functioning of the internal market. Nevertheless, some critical voices have been 
raised regarding certain provisions of the Directive, notably DAC6, insofar as its scope is 
very broad and does not match the standard developed at international level. 

4.3. 

Is the intervention still relevant (relevance)? 

4.3.1. Combating base erosion and aggressive tax planning 

The  erosion  of  tax  bases  and  aggressive  tax  planning,  resulting  from  the  increasing 
globalisation and mobility of people, capital, and companies, is one of the main challenges 
that the DAC aims to address. Overall, about half of the 83 respondents from the targeted 
consultations conducted for this evaluation in the context of the Study believed that the 
scope of this issue has been reduced, although tax authorities hold a much more positive 
view compared to intermediaries.  

Respondents often highlighted that the improvements stem from a global shift in public 
awareness  and  sensitivity  on  the  topic,  as  well  as  from  various  international  initiatives 
addressing  tax  avoidance  and  evasion,  undertaken  both  at  the  OECD  and  EU  levels, 
including DAC. 

Regarding  the  DAC’s  fitness  for  purpose  in  addressing  the  erosion  of  the  tax  bases  of 
Member States and aggressive tax planning, stakeholders hold a broadly positive opinion, 
in line with the findings of the previous evaluation. Tax authorities generally consider DAC 
appropriate  for  its  objectives,  as  reflected  in  annual  questionnaires  and  targeted 
consultations. This is also thanks to the fact that the DAC is a flexible tool that allows for 
integration of new areas for cooperation and new exchanges of information when the need 
emerges. As economies become increasingly interconnected, new business models emerge 
and  digital  platforms  proliferate,  traditional  tax  systems  face  new  obstacles  in  tracking 
income and ensuring compliance. By constantly evolving to include new components such 
as DAC7, which targets income from digital platforms, or DAC8 that ensures transparency 
in the area of crypto assets, the directive has remained relevant and effective in addressing 
the new challenges brough about by modern economic realities.  

However,  private  stakeholders,  while  mostly  positive  (60%  of  around  73  respondents), 
expressed less consistent feedback. Above all, while it appears that the fight against tax 
evasion is still of paramount interest to many stakeholders, some of the MNEs’ professional 
organisations wish to deregulate some parts of the DAC, with two business associations 
even  suggesting  that  they  be  abolished,  e.g.  DAC6.  However,  this  very  critical  stance 

48 

 
reflects only a minority of views, with the other business stakeholders calling instead for 
simplification and clarification of some provisions of the DAC (notably DAC6). 

4.3.2. Improving data quality 

The  relevance  of  information  is  indicated  by  the  ever-increasing  volumes  of  exchange; 
however, the quality of the information is critically important to achieve the benefits of the 
exchange.  

The higher the quality of the information the greater the possibility that it can be used by 
tax administrations. In the 2018-2023 period, the use of the information has significantly 
increased  as  compared  to  the  previous  5  years.  This  increase  can  be  attributed  to  the 
progress  made in  terms  of the identification of taxpayers.  Nearly all tax  authorities use 
DAC information extensively with effective results. 

This suggests that the issue of matching of information, which was very present in previous 
reports  (previous  evaluation  and  ECA  report),  is  less  problematic  than  before.  This 
improvement can be attributed to the increase in human and technical resources used by 
tax  administrations,  owing  to  the  fact  that  a  significant  part  of  the  information  is  still 
manually matched when the usual matching techniques (automated and fuzzy matching) 
are insufficient to identify the taxpayer68. However, the findings of the VISDAC Expert 
Team and FPG 037 show that there is still room for improvement in data quality.  

Bilateral  feedback  of  a  qualitative  and  quantitative  nature  is  an  integral  element  to 
improving data quality as it enables sending Member States to address quality issues for 
future exchange periods. This assessment is also supported by the findings of the VISDAC 
Expert Team and the evaluation.  

Unfortunately,  the  current  bilateral  feedback  system  is  archaic  and  not  fit  for  purpose, 
based  on  a  table-type  file  drawn  up  manually,  which  makes  it  time-consuming  and 
consequently the feedback mechanism is not utilised to its full potential.  

4.3.3. DAC6 reporting requirements  

According to both public and, even more, private stakeholders, some aspects of DAC6 are 
neither  clearly  defined  nor  easily  applicable.  On  the  one  hand,  given  that  DAC6  was 
introduced  only  recently,  some  difficulties  in  the  application  may  reflect  typical  initial 
implementation challenges. On the other hand, stakeholders claim that certain provisions 
are inherently problematic, particularly those concerning the definition of hallmarks, the 
main benefit test, and the intermediaries subject to reporting obligations.  

The generic nature of some of these hallmarks has at least initially resulted in a very large 
number of reports, the relevance of which is not always established by the receiving tax 
authorities. In response reporting persons, especially MNEs, have voiced criticisms, going 
so far as to call for the removal of certain hallmarks deemed to be of little relevance.  

68  Depending on the DAC exchange of information, between 5% and 15% of data cannot be identified 

automatically, which creates administrative burden for the tax authorities. 

49 

 
 
Moreover,  contributions  received  from  tax  advisors  and  legal  professions  point  to 
inconsistencies  in  how  DAC6  is  applied  among  Member  States,  due  to  varied 
interpretations of hallmarks and differing legal protections, which increased administrative 
burdens and legal uncertainty. To avoid these issues, stakeholders suggest the Commission 
and  the  Member  States  to  work  on  common  guidance  to  clarify  definitions  and  avoid 
discrepancies in application.69 

5.  WHAT ARE THE CONCLUSIONS AND LESSONS LEARNED? 

5.1.  Conclusions 

Overall,  DAC  provides  a  robust  legal  framework  that  facilitates  close  administrative 
cooperation  between  Member  States  tax  authorities  with  a  view  to  fighting  against  tax 
fraud,  evasion  and  avoidance.  The  Directive  and  its  various  amendments  have  been 
transposed without major problems and did not lead to infringements on the substance of 
the transposition.   

DAC  is  an  evolving,  adaptative  and  relatively  agile  instrument.  It  has  continued  to 
evolve regularly between 2018 and 2023 to adapt to the challenges of a complex economic 
environment, and the ever-increasing sophistication of tax evasion and avoidance in the 
context of globalisation, in line with international developments. 

The DAC led to the exchange of substantial volumes of information, which is growing 
over  time  especially  for  DAC1,  DAC2  and  DAC4.  The  data  of  automatic  exchange  is 
increasingly matched and used by tax authorities, both for risk assessment and control 
purposes and to foster voluntary tax compliance thanks to greater awareness of enhanced 
transparency.  The  evidence,  as  supported  by  the  view  of  tax  authorities  and  private 
stakeholders,  suggests  that  the  Directive  is  effective  in  contributing  to  safeguarding 
Member States tax base and tax revenue. Total  tax  benefits are estimated at about 
EUR 6.8 billion per year (about 0.3% of EU direct tax revenue).  

There is a consensus, supported by evidence, that DAC contributed to increasing Member 
States ability to fight tax fraud, evasion and avoidance, thereby contributing to ensure 
that taxes are paid in the Member State where they are due. AEOI, particularly DAC1 and 
DAC2, allows to identify undeclared tax income and assets and to increase compliance, 
via both enforcement and deterrence. 

The causal link between additional income and DAC3, DAC4 and DAC6 is more complex 
to establish, insofar as, for DAC3 and DAC6, the data is mainly descriptive, and for DAC4, 
it is not allowed to make direct use of the data exchanged to  establish tax adjustments. 
While there is no specific data for DAC4, the economic literature suggests that CbCRs has 
the capacity to increase the effective tax rate for multinationals.  

69  For a full analysis of DAC6 and the hallmarks, see the summary of the questionnaire to Member 

States, WPIV - September 2024 (Annex VIII)) and the elements from the OPC (Annex IX), as well as 
the targeted consultations (Annex XII). 

50 

 
 
AEOI, particularly DAC1 and DAC2, also have a deterrent effect on individual taxpayers, 
though  unquantified,  and  encourage  voluntary  tax  compliance:  DAC2  influenced  the 
disclosure of financial assets abroad and related taxes; DAC3, and to a lesser extent DAC4 
and  DAC6,  contributed  to  transparency  in  tax  arrangements  that  were  known  to  be 
particularly  harmful  for  Member  States  revenue.  The  deterrent  effect  of  DACs  on 
corporations’ profit-shifting was less significant, stakeholders mentioning in the OPC that 
the influence of DAC4 or DAC6 on their decisions had a relatively limited impact. 

This  relatively  positive  outcome  is  the  result  of  massive  use  of  DAC1  and  DAC2  data 
among the Member States, and the gradual integration of DAC3, DAC4 and, more recently, 
DAC6 data into the risk analysis models used to assess the tax risks associated with the 
taxpayers concerned. The VISDAC expert team was able to observe the extent of these 
developments, but also the incremental nature of the Member States’ approach. Each new 
type of information requires an update of the risk analysis system that requires mobilisation 
of substantial financial and human resources. As the study has shown, these investments 
are generally recovered over time by the improved accuracy of the analyses once they are 
in place. But they are nevertheless significant and cannot always be deployed immediately, 
due to the financial constraints that may limit their ability to deploy the appropriate tools 
rapidly. 

The Directive has 2 further objectives, that is contributing to the smooth functioning of 
the single market and increasing the fairness of the EU tax system. They are fulfilled 
to the extent that the Directive safeguards Member States’ tax revenues. DAC positively 
contributes to the functioning of the single market through 2 channels. First, it limits the 
opportunities for tax evasion and avoidance for companies and individuals operating cross-
border, thus removing or limiting tax-reducing distortions. Second, it has obtained positive 
results in harmonising reporting requirements for private sector operators, with respect to 
DAC2, DAC4 and DAC7, as well. Due to increased transparency, DAC also increases the 
fairness of the EU and national tax systems.  

The system works efficiently at the cost of major efforts and investments on the part of the 
various stakeholders, notably Member States’ tax authorities and the business, who seem 
sometimes to be struggling to keep pace with the numerous changes.  

A  comparison  of  costs  and  benefits  suggests  that  the  costs  associated  with  DAC  are 
commensurate with the benefits generated.  

The  overall  coherence  of  the  DAC  is  relatively  strong.  It  is  aligned  with  the  OECD 
principles for most of the measures that stem from it, such as DAC2 and DAC4 and, to a 
lesser extent, DAC3 and DAC6. As regards DAC6, the broad scope of the directive and 
the lack of clarity of some concepts have undermined the consistency of its application 
within  the  EU,  leading  to  divergent  interpretations  among  Member  States.  It  is  also 
complementary  in  its  objectives  with  the  measures  to  combat  money  laundering  and 
terrorist  financing  (AML  Directive),  and  those  to  combat  VAT  fraud  (Regulation 
904/2010). While the differences that may exist between the AML framework or the VAT 
framework and the concepts and definitions in the DAC may be justified insofar as the 

51 

 
scope of each piece of European legislation is different, it would make sense to explore the 
possibility to  better aligning  terms  or principles  wherever justified  and possible, with  a 
view to ensure simplification. 

As regards the EU added value, all tax authorities agree that DAC is more efficient than 
international or national alternatives. The main efficiency gains have to do with the binding 
nature of DAC under EU law, the underlying IT architecture and the uniform reporting 
requirements across the EU. DAC is believed to be a better framework, which is conducive 
to  bigger  exchanges  compared  with  international  peers,  which  in  turn  increases  the 
awareness of and familiarity with DAC. More exchanges mean more experience and hence 
learning  economies  in  data  processing  and  usage  and  actual  impact.  Furthermore,  the 
harmonisation also ensures the coherence with the rest of the EU acquis. 

As  regards  the  relevance,  the  DAC  keeps  being  very  relevant  and  crucial  in  the  fight 
against tax evasion and aggressive planning. The volume of exchanges and data exchanged 
is  constantly  increasing,  the  use  of  data  is  virtually  systematic  for  certain  areas  of  the 
Directive, and the instruments of cooperation and control are also being used effectively, 
leading  to  a  balance  costs/benefits  in  favour  of  additional  revenues  for  Member  States. 
However,  this  generally  positive  picture  is  nuanced  by  more  problematic  aspects:  as 
outlined  above,  the  complexity  of  certain  parts  of  the  directive  such  as  DAC6  and  the 
relatively unharmonised way in which they are implemented and applied can weaken the 
impact of the Directive.  

5.2.  Lessons learned 

5.2.1 The DAC legal framework is robust, but fragmentation of application across the EU 
increases administrative burden on business 

While  the  DAC  is  overall  perceived  as  providing  a  robust  legal  framework  for 
administrative cooperation some concerns were raised regarding the lack of consistency in 
the  application  of  the  DAC  provisions  across  Member  States  and  its  consequences, 
particularly in terms of increased administrative burden for the business. While the overall 
picture  is  coherent,  there  have  been  calls  for  greater  accuracy  in  some  concepts  and 
definitions, which should be better aligned across all the tax initiatives proposed at the EU 
level. Stakeholders also referred to the need to better align with and exploit synergies with 
other legal provisions that share the same or similar purposes, like Regulation 904/2010 
on cooperation in the field of VAT and the AML framework. 

The concerns focus on DAC6 which is perceived as complex, to some extent unclear and 
subject to more fragmentation in application, increasing the risk of legal uncertainty and, 
consequently,  the  burden  on  businesses.  According  to  private  stakeholders  and  tax 
authorities, it is the most challenging legislation to apply. Some of these challenges are 
likely  to  dissipate  in  the  light  of  the  judgements  of  the  CJEU,  which  clarify  some 
definitions  and  the  scope  of  the  legal  professional  privilege,  but  they  are  unlikely  to 
disappear completely due to the lack of harmonisation outside of tax policy.  

One  of  the  perceived  problems  of  DAC6  is  that  some  of  its  provisions  (e.g.,  the  main 
benefit test, certain hallmarks) are deliberately vague, as the legislator wanted the net to be 

52 

 
broad  enough  to  catch  all  forms  of  potentially  tax  harmful  cross-border  arrangements. 
Consequently, the legislation is  posing interpretative challenges for the Member States, 
leading to different interpretations and application of the DAC6 provisions across them, 
which create uncertainty among intermediaries and increase the burden and the associated 
costs70.  

5.2.2 The penalties framework for non-compliance with reporting obligations under the 
DAC varies considerably between Member States 

The DAC requires  Member States to  implement  effective, proportionate  and dissuasive 
penalties for non-compliance by reporting legal entities and natural persons under DAC2, 
DAC4 and DAC6.  

In its special reports on “Exchanging tax information in the EU” which was published in 
January 202171, the ECA highlighted the risk that penalties that Member States apply are 
not deterrent enough to ensure full compliance with the DAC2 reporting requirements.  

In the impact assessment for DAC8, the Commission analysed Member States’ penalties 
regimes and concluded that there were significant differences between the range of penalty 
amounts that Member States can impose, which affect their effectiveness and hinder the 
level playing field. Based on that analysis, the Commission proposed in 2022 to introduce 
minimum penalties for reportable offenses. However, this amendment was ultimately not 
accepted by the Council. The issue remains, and it is highlighted again by the ECA in the 
special report published in November 2024. The ECA recommended to the Commission 
to initiate infringement proceedings in those cases where there is sufficient evidence that 
Member States are implementing a manifestly inadequate penalty system for breaches of 
the DAC6. 

5.2.3 The quality of data has improved, but identifying taxpayers is still an issue for some 
exchanges 

The  quality  of  the  data  has  undeniably  improved  between  2018  and  2022,  making  it 
possible to significantly improve the matching of DAC1 and DAC2 data. Given the smaller 
populations involved, the issue is less pressing for DAC4, DAC3 and DAC6. The latter 2 
nevertheless display recurring problems with the abstract data resulting from the provision 
of a substantial part of the summary information in free text format.  

Nevertheless, as far as DAC1 and DAC2 are concerned, since Member States exchange 
hundreds of thousands of records each year, even a very small percentage of unmatched 
data can represent thousands of unidentified taxpayers and therefore cause tax losses due 
to the inability to match. In addition, this unmatched data generates a need for providing 
manual feedback which is administratively cumbersome.  

70  EUROPEAN COURT OF AUDITORS, Special Report 27/2024: Combatting harmful tax regimes and 
corporate tax avoidance – The EU has established a first line of defense, but there are shortcomings in 
the way measures are implemented and monitored. 

71  EUROPEAN COURT OF AUDITORS, 

https://www.eca.europa.eu/Lists/ECADocuments/SR21_03/SR_Exchange_tax_inform_EN.pdf. 

53 

 
 
Furthermore,  the  feedback  process  used  to  identify  and  solve  matching  problems  at 
bilateral level is based on a communication model that is no longer adapted to the issues 
at  stake:  in  other  terms,  the  current  model  of  feedback  is  not  satisfactory  for  Member 
States,  insofar  as  it  is  based  on  an  outdated  process  that  does  not  facilitate  widespread 
handling of issues encountered. 

Beside identification issues, there is also a general observation from tax authorities about 
the quality of data that depends on a literal approach, which is the case for the summaries 
of DAC3 and DAC6. This relatively poor quality of the DAC3 and DAC6 summaries calls 
for improvement. 

Another aspect is that it appears that one of the major weaknesses in the reporting schema 
of DAC6 is the fact that the data field to indicate the names of non-EU countries involved 
in a cross-border arrangement is not mandatory. As a result, it is difficult for the Member 
States to identify whether/which non-EU jurisdictions are involved. 

5.2.4 The use of data is widespread (while not systematic), but administrations should be 
made more accountable for how DAC data is used  

Along  with  the  constant  improvement  in  the  quality  of  the  information  exchanged,  the 
increase  in  the  use  of  data  by  the  Member  States  is  one  of  the  most  significant 
developments since the first evaluation. However, while DAC1 and DAC2 are now used 
almost  systematically,  this  is  not  yet  the  case  for  DAC3,  DAC4  and  especially  not  for 
DAC6.  

Use  of  data  had  developed  massively,  including  use  for  other  purposes  than  tax  bases-
related  only  (e.g.  recovery  of  tax  claims).  However,  the  current  situation  cannot  yet  be 
generalised across the DAC, particularly insofar as the descriptive data present in DAC3 
and DAC6 are not as easy to integrate as the digital data provided by DAC1 and DAC2. 

Member States find it easier to integrate quantitative data (income or amount of assets) 
exchanged under DAC1 and DAC2 than data requiring more in-depth analysis as to their 
significance, such as DAC3, DAC4 and DAC6. While tax authorities make extensive use 
of DAC1 and DAC2 information to establish, re-assess tax bases or corroborate the tax 
returns of the taxpayers concerned, DAC3, DAC4 and DAC6 data are more easily included 
in a risk analysis cycle which, for example, makes it possible to assess the possibility of a 
tax evasion scheme. There is still room for improvement to ensure that a holistic approach 
to this data is implemented in certain Member States, moving from a case-by-case analysis 
to a more systematic approach. 

Despite these very concrete results, some private stakeholders seem to be sceptical about 
the evidence, addressing tax authorities with calls for greater transparency when it comes 
to the use of data. The European Court of Auditors is mentioned several times in replies to 
the public consultation as the body which is best placed to make a ‘real assessment’ of the 
implementation of the DAC, DAC6 in particular.  

This is one of the few points where there is a real gap between reality (widespread use of 
data, which continues to progress, allows tax authorities to better detect situations at risk 

54 

 
or  dubious  taxpayers  and  procure  revenues  to  Member  States)  and  the  perception  from 
certain stakeholders. This is especially surprising since at least some Member States do not 
hesitate to communicate publicly on the use of data resulting from automatic exchanges of 
information. This shows that there is a grey area regarding awareness of the use of data, 
which should be clarified.  

While the Member States report annually to the Commission under the obligations laid 
down in the DAC (Yearly assessment and annual questionnaire on the functioning of the 
DAC, statistics) on different aspects of the DAC, including quality and use of data, they 
do not necessarily do so vis-à-vis the public. Moreover, not all the Member States have 
tools to measure the effectiveness of administrative cooperation in the form of metrics or 
indicators. Where these indicators are available, they are not necessarily harmonised, and 
they often remain essentially internal. 

In light of the comments from some stakeholders on the use of the DAC data, it seems 
obvious that the increasing development of use of information by tax authorities has not 
been reflected in terms of monitoring the outcome, or at least not sufficiently publicised.  

In 2021, the European Court of Auditors requested more transparency and visibility of the 
achievement and results of Member States and called for a common EU framework for 
monitoring administrative cooperation activities and measuring their outcome better. In its 
conclusion  the  Court  stated,  “There  is  no  common  EU  framework  for  monitoring  the 
system’s  performance  and  achievements,  and  the  individual  assessments  carried  out  by 
some Member States are short on clarity and transparency”. 

Member  States  have  initiated  workstreams,  together  with  the  Commission  services,  to 
address the recommendations of the ECA. A set of harmonised metrics and indicators was 
endorsed by the heads of Tax administrations in December 2024. The set covers DAC1, 
DAC2,  DAC3  and  DAC4,  including  non-automatic  exchange  of  information.  It  was 
recommended that the Member States should implement the metrics and report the results 
on  an  annual  basis  by  the  Central  liaison  offices  of  the  Member  States  to  the  relevant 
Commission services. 

The collective efforts  of the Commission and Member States must be consolidated and 
strengthened. At the same time there is a need for increased focus on publishing the results 
obtained,  so  that  the  public  is  better  informed  about  efforts  and  successes  in  the  fight 
against tax evasion. 

5.2.5.  The  IT  information  exchange  systems  work,  but  require  significant  allocation  of 
resources to operate them   

Overall,  the  information  systems  made  available  by  the  European  Commission  and  the 
Member States are not the subject of direct criticism, but the significance of the costs and 
resources  deployed  to  make  it  work  is  an  issue  given  the  current  state-of-play:  the 
information exchanges provided for in the DAC operate in parallel, autonomously, for each 
type of exchange. In addition, they are handled by the Member States, which develop their 
own interfaces to make them available to stakeholders subject to reporting obligations.   

55 

 
Within the framework of the EU, this differentiated approach for the 27 Member States 
can be justified by the fiscal sovereignty that is applied, including in the implementation 
of the DAC. However, there is a strong shared interest among the various stakeholders, 
both  in  the  private  sector  and  on  the  part  of  the  Member  States,  for  enhancing  tax 
compliance and efficiency through digital transformation.  

This calls for a more uniform approach to achieve economies of scale, and improve the 
system  on  the  basis  of  simplification,  rationalisation  of  investments,  agility  and 
synchronisation of evolution among Member States. 

56 

 
ANNEX I: PROCEDURAL INFORMATION 

1. 

Lead DG, Decide reference and, if relevant, Work Programme reference. Derogations 
granted and justification 

DG  TAXUD;  PLAN/2022/2895  included  in Annex  II  to  the  2024  Commission  work 
programme. No derogations granted. 

2.  Organisation and timing  

The chronology of the evaluation can be summarised as follows: 

- 

Interservice steering group: created on 10 January 2023, with the participation of 
DG COMP, DG FISMA, DG ECFIN, DG TAXUD. 

-  Meetings of the interservice steering group: the interservice steering group met 

3 times on 9 February, 2 March 2023 and 15 April 2024. 

- 

- 

- 

- 

- 

- 

- 

Terms of reference for the external study: finalised September 2022. 

External  study:  carried  out  between  December  2022  and  December  2023  by 
Ramboll  in  collaboration  with  Syntesia  Policy  and  Economics  and  London 
Economics. 

Questionnaire on the functioning of the DAC to Member States: from May 2024 
to July 2024. 

Questionnaire on the relevance of annex IV of DAC6 to Member States: from 
May 2024 to July 2024. 

Public consultation (questionnaire online): from 7 May 2024 to 30 July 2024. 

Call for Evidence: from 7 May 2024 to 30 July 2024. 

Targeted consultations: 25 and 26 September 2024. 

3. 

Evidence used together with sources and any issues regarding its quality (i.e. has the 
information been quality assured?) 

The evidence used in this evaluation collected through desk research was derived from 
the following sources: 

- 

Commission documents: 

o 

o 

Commission Staff Working Document Impact Assessment Accompanying the 
document Proposal for a Council Directive amending Directive 2011/16/EU 
as  regards  mandatory  automatic  exchange  of  information  in  the  field  of 
taxation in relation to reportable cross-border arrangements, June 2017 

Commission  Staff Working Document Evaluation of the Council Directive 
2011/16/EU  on  administrative  cooperation  in  the  field  of  taxation  and 
repealing Directive 77/799/EEC, September 2019 

57 

 
 
o 

Replies  of  the  European  Commission  to  the  European  Court  of Auditors 
Special Report, November 2024 

- 

Reports from the Court of Auditors: 

o 

o 

Special  Report  No  03/2021:  Exchanging  tax  information  in  the  EU:  solid 
foundation, cracks in the implementation, March 2021 

Special Report 27/2024: Combatting harmful tax regimes and corporate tax 
avoidance  –  The  EU  has  established  a  first  line  of  defence,  but  there  are 
shortcomings  in  the  way  measures  are  implemented  and  monitored, 
November 2024 

- 

Report and resolution from the European Parliament: 

o 

o 

European Parliament legislative resolution of 10 March 2021 on the proposal 
for  a  Council  Directive  amending  Directive  2011/16/EU  on  administrative 
cooperation  in  the  field  of  taxation  (COM(2020)0314 –  C9-0213/2020 
– 2020/0148(CNS)), March 2021 

European Parliament resolution of 16 September 2021 on the implementation 
of  the  EU  requirements  for  exchange  of  tax  information:  progress,  lessons 
learnt and obstacles to overcome (2020/2046(INI)), September 2021 

- 

Case law from the Court of Justice of the European Union: 

o 

o 

o 

o 

o 

C-694/20 - 08/12/2022 - Orde van Vlaamse Balies e.a. 

C-623/22 – 29/07/2024 - Belgian Association of Tax Lawyers and Others v 
Premier ministre/ Eerste Minister 

C-432/23 – 26/09/2024 - F and Ordre des avocats du barreau de Luxembourg 
v Administration des contributions directes 

Berlioz Investment Fund SA v Directeur de l'administration des contributions 
directes (Case C-682/15)  

B v État Luxembourgeois and État Luxembourgeois v B, C, D and FC (Cases 
C-245/19 and C-246/19) 

The other sources of evidence used in the evaluation include: 

- 

- 

Evidence from Member States: replies to written questionnaires in the context of 
the external study and submitted to the Commission; 

Evidence  from  public  consultation  and  call  for  evidence:  contributions  from 
business  associations,  individual  companies,  EU  citizens  and  non-governmental 
organisation (NGO). 

- 

Evidence from economic operators (targeted consultations):  

The external study by Ramboll in collaboration with Syntesia Policy and Economics and 
London  Economics  is  based  on  a  comprehensive  collection  of  information  collected 
through  desk  research,  stakeholder  interaction,  and  data  review,  with  a  focus  on  both 

58 

 
quantitative  and  qualitative  analysis.  The  contractor  cross-checked  evidence  from 
multiple sources available to the Commission, ensuring reliability. 

Additional  consultation  activities  carried  out  by  the  Commission  helped  refine  the 
quantitative data, enhancing the robustness of the findings.  

Overall, the present evaluation benefited from improved data availability compared to the 
previous evaluation and the quality of evidence is considered satisfactory. 

4.  Use of external expertise 

The evaluation is supported by an external study conducted by a consortium of consulting 
firms and research institutions, led by Ramboll in collaboration with Syntesia Policy and 
Economics and London Economics (Specific Contract No. TAXUD/2022/AO-12 under 
Framework Contract TAXUD/2019/CC/148-149-150 for a “Study on evaluation of the 
Directive 2011/16 EU and its amendments”). This study provided evidence and findings 
on  the  implementation  of  the  DAC,  forming  the  basis  of  the  assessment  in  this  Staff 
Working Document. 

The  methodology  for  data  collection  was  discussed  and  agreed  upon  with  the 
Commission. Additionally,  this  Staff Working  Document  considers  the  perspectives  of 
EU-wide  trade  representative  organizations  regarding  the  practical  implementation  of 
DAC provisions and related processes. 

59 

 
 
 
ANNEX II. METHODOLOGY AND ANALYTICAL MODELS USED 

Description of methodology 

The Commission conducted this evaluation in line with better regulations principles, ensuring 
consistency with the 2019 evaluation and integrating findings from the 2021 and 2024 ECA 
reports and the 2021 EP resolution72.  

Specifically, the evaluation consisted of 3 main phases: 

1. 

Structuring  phase:  this  phase  involved  preliminary  activities  for  structuring  and 
developing the evaluation, including the identification of the external contractor and other 
stakeholders to be consulted; 

2.  Data gathering and analysis: this phase encompassed data analysis, consultation activities, 
and  legal  and  desk  research,  providing  the  necessary  data  and  information  for  the 
subsequent assessment; 

3. 

Evaluation  and  lesson-learning:  in  this  final  phase,  the  collected  data  and  information 
were  analysed  and  used  to  produce  the  evaluation  report,  covering  the  5  evaluation 
criteria, as well as to formulate conclusions and lessons learned. 

Figure 24. Evaluation methodology and its phases 

Structuring phase 

The first phase of the evaluation began in November 2022 with the signing of a contract for an 
external study. Specifically, the first phase encompassed the inception phase, which concluded 
with  the  submission  of  the  revised  inception  report  in  March  2023.  Key  activities  from  the 
external contractor’s side included: 

• 

Data mapping: identifying available data from both public and non-public sources. Public 
data  mapping  involved  reviewing  legal  information  and  literature,  including  policy 
documents  and  academic  contributions.  Simultaneously,  internal  Commission  data 

72  See subsection 3.1.5. 

60 

 
 
 
• 

• 

sources  -  such  as  EU  and  national  statistics,  DAC  tool  data,  and  Member  States’ 
questionnaires - were organized and reviewed. 

Familiarization  interviews:  conducting  16  interviews  to  identify  key  issues,  gather 
insights, and secure support from EU organizations for stakeholder engagement. 

Refinement  and  operationalization  of  methodology:  fine-tuning 
the  evaluation 
methodology and developing tools for subsequent fact-finding, including the Directive’s 
Intervention  Logic  (see Annex  VI),  Evaluation  Matrix  (see Annex  III),  and  the  final 
consultation  strategy  and  materials,  such  as  sample  strategies  and  consultation 
questionnaires. 

Data gathering and analysis phase  

The data gathering and analysis phase lasted from March to June 2023. Specifically, this phase 
included: 

• 

• 

Implementation  analysis:  assessing  the  transposition  of  DAC  provisions  into  national 
legislation. 

AEOI  and  administrative  cooperation  analysis:  conducting  a  quantitative  analysis  of 
AEOI  statistics  to  examine  data  availability,  geographical  exchange  patterns,  and  the 
completeness  and  timeliness  of  exchanged  information. The  study  also  reviewed  non-
AEOI tools through CACT statistics. 

•  Member States questionnaires: evaluating responses to 3 key surveys: 

1. 

2. 

The Yearly Assessment Questionnaire (covering AEOI provisions). 

The Questionnaire on the Functioning of the Directive (assessing Member States’ 
perspectives on all DAC provisions, including administrative cooperation). 

3. 

The Questionnaire on the Relevance of DAC6 Annex IV. 

• 

• 

Desk  research  and  legal  analysis:  reviewing  academic  literature  and  other  qualitative 
sources relevant to the Directive’s assessment. 

Targeted consultation: conducting over 50 interviews with private stakeholders and 14 
interviews with tax authorities. Additionally, 3 surveys were carried out: 

o 

o 

o 

An email survey of the remaining 13 tax authorities. 

An online survey of financial institutions (11 responses). 

An online survey of intermediaries (60 responses). 

Evaluation and lesson-learning phase 

The evaluation and lesson learning lasted from June to September 2023 and is primarily based 
on  the  findings  of  the  external  study  carried  out  by  Ramboll  in  collaboration  with  Syntesia 
Policy and Economics and London Economics. During this phase, the final evaluation of data 
was performed. All collected data, information, and viewpoints were systematized, triangulated, 
and analysed to answer the evaluation questions, ensuring a comprehensive assessment.

61 

 
ANNEX III. EVALUATION MATRIX 

Evaluation questions matrix – Efficiency  

Question 

Sub-questions 

Indicators 

#  To  what  extent  was  the 
intervention  successful  and 
why 

# Level of costs and cost savings 
borne by tax authorities 

# Level of costs and cost savings 
borne by the private sector 

•  Adjustment costs (investment, operating) due to AEOI  
•  Adjustment costs due to other forms of ACDT 
•  Share of expenditures financed by EU budget (particularly Fiscalis) 
•  Cost savings compared to pre-Directive situation 
•  Administrative burdens due reporting obligations 
•  Administrative burdens for financial institutions due to DAC2 AEOI 
•  Administrative burdens for MNE due to DAC4 AEOI 
•  Administrative  costs  and  burdens  for  intermediaries/companies  due  to  DAC6 

AEOI 

#  Extent  to  which  costs  are 
commensurate with the outcome 
achieved 

•  Administrative burdens for online platform operators due to DAC7 AEOI 
•  Comparison of costs and benefits 
•  Stakeholders’ views on whether the additional costs were justified based on the 

results achieved 

Evaluation questions matrix – Effectiveness  

Question 

Sub-questions 

Indicators 

#  To  what  extent  was  the 
intervention  successful  and 
why 

#  Extent  to  which  the  Directive 
provided an effective framework 
for Member States to cooperate 

•  Member States degree of satisfaction as reported in expert group meetings and/or 

DAC-related Fiscalis events 

•  TAs reporting good experience in the interaction with other Member States (by 

provision) 

62 

 
 
 
#  Extent  to  which  the  Directive 
increased 
to  an 
contributed 
capacity 
fraud, 
fight 
to 
evasion and avoidance 

tax 

#  Extent  to  which  the  Directive 
increased 
resulted 
spontaneous tax compliance 

an 

in 

to  which  Fiscalis 
#  Extent 
projects 
the 
contributed 
achievement  of  DAC  specific 
objectives 

to 

#  Extent  to  which  the  Directive 
contributed to safeguard Member 
States’ tax revenues 

#  Extent  to  which  the  Directive 
contributed 
smooth 
to 
Internal 
functioning  of 
Market and to a perceived fairer 
tax system 

the 
the 

•  TAs reporting good experience with sharing of best practices 

•  Extent  to  which  the  information  received  via  AEOI,  EOIR,  and  SEOI  is 
complete, of sufficient quality, and is received within the established time limits 
•  Extent to which data received via AEOI and SEOI is processed and used for tax 

control 

•  Effect of PAOE, simultaneous controls, and joint audits on the effectiveness of 

the fight against tax fraud 

•  Extent to which AEOI data (particularly DAC1 and DAC2) are used to encourage 
spontaneous tax compliance (e.g. use of DAC1 and DAC2 data for pre-filling of 
tax returns, informal letters) 

•  Evidence of increased spontaneous tax compliance (deterrent effect) 
•  Contribution of Fiscalis actions to the achievement of DAC specific objectives 

•  Additional  tax  assessed  and/or  collected  as  a  result  of  the  provisions  of  the 

Directive (by provision) 

•  Stakeholders’  perception  on  the  extent  to  which  the  Directive  contributed  to 

safeguard Member States tax revenues 

•  Increased perceived fairness of the tax system 
•  Increased perceived functioning of the Internal Market 

63 

 
 
 
 
Evaluation questions matrix – Coherence  

Question 

Sub-questions 

Indicators 

#  To  what  extent  was  the 
intervention  successful  and 
why 

# Extent to which the Directive’s 
provision  are  consistent  with 
other related EU policies 

•  Existence of conflicting or synergies  
•  Existence of gaps and overlaps 

# Extent to which the Directive’s 
provision  are  consistent  with 
OECD 
international 
policies 

other 

•  Existence of conflicts or synergies 
•  Existence of gaps and overlaps  
•  Existence of operational and technical inconsistencies 

Evaluation questions matrix – EU added value 

Question 

Sub-questions 

Indicators 

# How did the EU intervention 
make  a  difference  and  to 
whom  

#  Extent  to  which  the  results 
additional 
generated 
are 
to 
compared 
national/international initiatives 

# Extent  to  which the efficiency 
of  the  tools  and  mechanisms  of 
the  Directive 
to 
possible alternatives 

is  superior 

•  Additionality of the Directive with respect to effectiveness 
•  Additionality of the Directive in guaranteeing a homogeneous implementation of 

international provisions 

•  Additionality of EU financial support 

•  Stakeholders’  perception  of  the  advantages  of  having  EU-wide  systems, 

procedures, and tools compared to national or international alternatives 

•  Additional  costs  and  cost  savings  generated  by  the  systems  and  provisions 

connected to the Directive 

64 

 
 
 
 
 
Evaluation questions matrix – Relevance 

Question 

the 

#  Is 
relevant 

intervention  still 

Sub-questions 

Indicators 

# Extent to which the objectives 
its 
the  Directive  and  of 
of 
amendments  are  aligned 
to 
Member States needs 

•  Absolute magnitude of the issues at stake (e.g. estimates of incomes and assets 
generated in Member States other than the one of residence; estimates of cross-
border tax evasion and avoidance)  

•  Relative magnitude of the issue at stake (e.g. ratio between country nationals’ 
income and incomes exchanged under DAC1 AEOI; comparison between DAC4 
exchanges and MNE headquarters in Europe)  

•  Stakeholder perception of the alignment between the Directive objectives and the 

needs of EU tax systems 

#  Extent  to  which  the  tools  and 
provisions  of  the  Directive  are 
appropriate  and  in  line  with  its 
objectives 

•  Stakeholder perception of the fitness of the Directive to its objectives 
•  Stakeholder  perception  of  the  appropriateness  of  the  main  features  of  the 

Directive (scope, definitions, etc.)  

•  Evidence of issues in the design of the tools and mechanisms of the Directive 

65 

 
 
 
 
ANNEX IV. OVERVIEW OF BENEFITS AND COSTS 

Methodologies used in the cost-benefit analysis  

66 

 
Details on estimated costs for private stakeholders – Source: Ramboll Study 

18 financial institutions or federations, via interviews and the survey carried out by Ramboll for the study provided elements to quantify the administrative 
burdens from DAC2. These include data from 6 very large institutions, as well as from 9 small and medium financial institutions, originating from six 
Member States across the various EU regions. In addition, to the data provided by single institutions, three federations provided aggregated or specific data 
about their members or whole Member States. Data include the number of accounts and clients reported, for both new and existing customers, and cover 
about 2.4 million reportable accounts (that is more than 10% of the total). Financial institutions and their federations were asked to estimate the additional 
time spent for onboarding clients, the set-up costs, as well as the ongoing costs. Between 11 and 13 institutions could provide full or partial estimates for 
the various cost categories. Eurostat data on earning statistics per occupation have been used to monetise the time spent by the internal personnel.  

Data on the population were estimated based on the 2022 Facts and Figures report by the European Banking Federation and the European Central Bank 
statistical warehouse. The population includes all EU banks (5,263 in 2021) and an estimate of other financial institutions covered by DAC2. As for other 
financial institutions (e.g. custodian banks, certain investment entities, specialised insurance companies), no detailed information exists on the number of 
those covered by DAC2 reporting duties.  

It has been considered that this population corresponds to half of the bank population (i.e. about 2,600 other financial institutions). Significant difference 
in cost estimates exist within the population, which is hence segmented between large banks on one side, and medium and small banks and other financial 
institutions on the other side. The banks directly supervised by the ECB (99) are considered to be large banks, while the rest is considered to be medium 
or small banks. Within these two groups, cost estimates are consistent. 

For  the  quantification  of  administrative  burdens  from  DAC4,  data  have  been  provided  by  11  entities,  including  4  business  federations  (and  members 
thereof) and 7 MNEs, via interviews and the survey carried out by Ramboll for the study. Data include the set-up and recurring costs incurred by the 
companies, distinguishing among IT costs, external consultants’ fees, personnel costs and training costs. 

The population of MNEs concerned can be inferred from DAC4 statistics, and it is estimated at 4,750. As it is often the case for obligations consisting of 
or requiring the collection of data from the MNEs’ internal systems, costs per company vary between large-scale and small-scale entities. Large-scale 

67 

 
MNEs are very complex entities, with a significant presence in more than 5 Member States and a turnover in excess of EUR 10 billion; they are estimated 
to represent 10% of MNEs. Small-scale SMEs have a lower turnover and operate in fewer Member States; they represent the vast majority (90%) of MNEs. 

Costs also depend on the extent to which CbCR data could be extracted from the internal systems of the companies or not. In the former case, initial 
compliance  efforts  are  limited  to  familiarisation and  mapping.  Otherwise,  the  efforts  could  become  significant,  as  they may  require  adaptation  of  the 
accounting  and  enterprise  resource  planning  systems  (with  the  ensuing  IT  costs),  as  well  as  additional  efforts  to  collect  and  produce  the  information 
required. Based on the targeted consultation, the set-up efforts were limited for the majority of companies, since all or most of the information was already 
available or could be easily adjusted to match CbCR requirements. Hence, it is assumed that the process was more complex for 20% of MNEs (uniformly 
across both large- and small-scale entities) reporting, data handling and processing, as well as of obtaining additional data from customers compared to 
what is necessary for business purposes (or for compliance with other regulation). 

Estimation of tax benefits from DAC1 and DAC2 AEOI, as well as those from non-AEOI activities – Source: Ramboll Study 

First, data on tax benefits reported in the Yearly Assessment and CACT statistics were retrieved from the annual submissions. Data were first checked for 
consistency. Consistency checks consisted in: (i) identifying outliers, i.e. countries that generated a disproportionate amount of benefits for a given tool in 
a given year; (ii) identifying geographical outliers, i.e. countries which generated an amount of benefits significantly higher controlling for their economic 
size (in terms of tax revenues, GDP); (iii) identifying break in the time series, i.e., for any given country, years in which tax benefits where significantly 
different from the average of the period. Outliers were discussed with tax authorities during the targeted consultations carried out by the contractor in 
charge of the study, clarifying whether they resulted from mistakes in the calculation of benefits, compilation of the reporting tools, or reflected their actual 
estimates. When no sufficient information  could  be found to justify outliers, they were removed from the calculation or replaced with average values 
reflecting normal trends. When the above steps were completed, reported tax benefits, i.e. the benefits as reported by the national tax authorities, were 
estimated.  

Consequently, for each DAC tool, the data coverage was then determined. This required considering the number of reporting Member States, as well as 
the weighted EU coverage. Weights per each country were calculated by considering GDP in PPS, direct tax revenue (as a proxy of economic size), and 
operating expenditures by tax administrations (as a proxy of compliance effort). Based on these weights, estimated EU tax benefits were extrapolated. 
Estimates are considered partly robust when the data coverage is higher than 25%. However, since this remains a low threshold, EU benefits are always 
presented as ranges. When data series do not achieve such a coverage, the extrapolation is not performed. When data series do not achieve such a coverage 

68 

 
for a number of years, the extrapolation is presented as tentative estimates for these years. Based on the above, no disaggregation of estimates (e.g. in terms 
of DAC1 incomes, between ex-ante and ex-post activities, or per non-AEOI tools) is possible.  

The following methodology applies to the estimates of tax benefits from DAC4 AEOI: given the nature of data exchanged under DAC3 and DAC4, tax 
authorities use them in their tax risk assessment analysis but do not link the data directly with tax benefits. The collection of such data was attempted 
between  2018  and  2020,  and  then  discontinued,  since  no  Member  State  could  provide  estimates.  This  is  due  to  the  more  tenuous  link  between  the 
information received and tax assessments. Indeed, the information from DAC3 and DAC4 do not directly lead to the identification of unreported taxable 
basis. Rather, they typically help identifying taxpayers at risk or suspicious behaviours and are one of the sources that contribute to risk analysis. Also, it 
is more difficult to attribute the benefits, in terms of additional taxes assessed for or reported by MNEs, to each of the various tools, i.e., DAC3, DAC4 
and, in perspective, DAC6. Estimates on the impact of public CbCR can be retrieved from the economic literature.  

The parameters from this analysis have been adapted to estimate the impacts of DAC4. DAC4 do not require tax authorities or MNEs to publicly disclose 
their CbCR (differently from the requirements for large banks or the extractive industries). Hence, the likely effect of DAC4 is a fraction of those estimated 
for public CbCR. This fraction is captured by the conversion factor. The central value of the conversion factor is 0.33, meaning that the effect of DAC4 is 
one third of that of public CbCR. Given the uncertainty on the magnitude of the effect of DAC4 compared to public CbCR, a sensitivity analysis of the 
conversion factor is carried out, and benefits are presented in a range. The sensitivity values are set at 0.25 (one quarter) and 0.5 (half). This corresponds 
to an increase of the MNEs’ effective tax rate of 1.0%, with sensitivity values at 0.7% and 1.5%. 

Cost vs Benefits (net benefit) – Source: Ramboll Study 

The estimate of benefits is subject to larger uncertainties. On the one side, only a minority of Member States is able to track and monitor the tax benefits 
from  DAC,  and  the  accuracy  of  the  data  could  not  be  independently  verified. Also,  the  largest  share  of  benefits  is  attributed  to  DAC4,  based  on  a 
conservative application of the impacts of public CbCR, but as discussed above, a number of caveats apply. Considering these limitations, total DAC 
benefits fall in the EUR 5 – 10 billion range, with a central estimate of EUR 6.8 billion. Considering only tax benefit estimates based on data from tax 
authorities (DAC1, DAC2 and non-AEOI), DAC benefits amount to about EUR 1.2 billion. 

69 

 
 
 
 
Figure 24: Benefits of DAC (EUR million) – Estimation with central estimate / low range – high range approach 
Central estimate 
Benefits per DAC 

Low Range 

High Range 

DAC1 

DAC2 

DAC4 

Non-AEOI 

Total Benefits 

240 

880 

5,600 

60 

6,780 

50 

680 

4,200 

10 

4,940 

390 

1,070 

8,230 

110 

9,800 

Note. Non-AEOI benefits include those due to EOIR, PAOE and simultaneous controls. Source: Ramboll study 

Based  on  this  analysis,  the  recurring  burdens  due  to  DAC  are  more  than  commensurate  with  the  benefits  generated.  Under  the  various  sensitivity 
scenarios (see below), the annual net benefits are in between 500 and 6,100 billion. Net benefits remain positive and significant even considering the 
uncertainties linked to the quantification of DAC4 impacts. Even under the most conservative estimates, i.e. those carried out based on primary data on 
tax benefits provided by a growing number of Member States, benefits are at least two times the burdens incurred. In the other scenarios, they are 
between eight to 10 times larger than the costs incurred.  

70 

 
 
 
 
 
 
 
 
Figure 25: Net benefits and cost-effectiveness ratio 

Scenario 

Costs 
(€Mln) 

Benefits
(€Mln) 

Annual net benefit 
(Benefits – Costs) (€Mln) 

Cost-Effectiveness Ratio 
(Benefits/Costs) 

Comprehensive scenario  650 

Low-range scenario 

Data-based scenario 

650 

650 

6780 

4940 

1180 

6130 

4290 

530 

10,43 

7,6 

1,82 

~10 

~8 

~2 

Cost and benefit figures rounded up to the  tens of millions. Costs include recurring adjustment costs and administrative burdens from DAC provisions for which benefits  could be 
quantified. These estimates do not represent net costs, as the associated cost savings could not be quantified. 

Three scenarios are considered for the cost-effectiveness analysis: 

Sensitivity scenarios for cost-effectiveness analysis – Source: Ramboll Study 

•  The comprehensive scenario, based on the central estimates of all costs and benefits; 
•  The low-range scenario, based on the low-range estimates of all costs and benefits; 
•  The data-based scenario, that consider only  data  collected  from  stakeholders and tax  authorities and excludes the literature-based estimates of 

DAC4 benefits. 

As shown above, the cost-effectiveness analysis is robust across the three scenarios: 

• 

• 
• 

In the comprehensive scenario, benefits are significantly higher than costs, with a cost-effectiveness ratio of about 10 and annual net benefits of 
about 6.1 billion. 
In the low-range scenario, benefits remain higher than costs, with a cost-effectiveness ratio of about 8 and annual net benefits of about 4.3 billion. 
In the data-based scenario, DAC4 benefits are excluded. In this case, net benefits amount to EUR 500 million, with a cost-effectiveness ratio of 
about 2.  

71 

 
 
Table 1. Overview of costs and benefits identified in the evaluation 

Citizens/Consumers  

Businesses 

Administrations 

[Other…] _ specify 

Comment  Quantitative  

Comment 

Quantitative 

Comment  

Quanti
tative  

Quantitati
ve 

Commen
t 

Cost and benefit figures rounded up to the tens of millions. Costs include recurring adjustment costs and administrative burdens from DAC provisions 
for which benefits could be quantified. These estimates do not represent net costs, as the associated cost savings could not be quantified 

Costs: 

Direct compliance costs 
(adjustment costs, 
administrative costs, 
regulatory charges) 

Type: 
recurre
nt 

Irrelev
ant 

Irrelevant 

The costs presented are 
better monitored by 
administrations. They do 
not follow the precise 
nomenclature proposed by 
the Commission in its 
assessments.  

The costs of developing 
and maintaining the 
necessary IT architectures 
are particularly monitored. 
This leads to the 
following observation: 
while development costs 
are particularly significant 
for administrations, they 
tend to decrease over 
time, with recurrent costs 
being relatively limited. 

The costs presented 
are based on 
projections using 
limited data shared 
mainly by financial 
institutions. These 
relate almost 
exclusively to 
mandatory due 
diligence 
procedures to get 
information from 
customers of these 
financial 
institutions within 
the framework of 
the common 
reporting 
standards.  

This includes 

72 

EUR 42 
million 

EUR 604 
million 

 
                        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
thousands of 
entities across the 
27 Member States, 
but no official 
consolidated 
figures were found 
in the public 
sources consulted. 

 The costs are 
electronic 
infrastructure costs, 
but also human 
resources costs for 
tracking files. 
However, there is 
no solid 
documentation 
from reporting 
third parties 
illustrating the 
breakdown of these 
costs. 

The costs of other 
exchanges are 
relatively limited. 

73 

 
 
 
 
 
 
 
Benefits: 

Direct benefits (such as 
improved well being: 
changes in pollution 
levels, safety, health, 
employment; market 
efficiency) 

Indirect benefits (such as 
wider economic benefits, 
macroeconomic benefits, 
social impacts, 
environmental impacts) 

Between 
EUR 1180 -
6700 million 

Under the various 
sensitivity scenarios, 
the annual net 
benefits are in a 
range between 500 
and 6,100 billion 

74 

 
 
 
 
 
 
 
 
 
 
TABLE 2:  Simplification and burden reduction (savings already achieved)  

Report any simplification, burden reduction and cost savings achieved already by the intervention evaluated, including the points of comparison/ where 
available (e.g. REFIT savings predicted in the IA or other sources).  

Citizens/Consumers/Workers 

Businesses 

Administrations 

[Other…] _ specify 

Quantitative   Comment 

Quantitative   Comment  Quantitative  Comment   Quantitative  Comment 

Title  

Type: One-off / recurrent 
(select) 

N/A 

N/A 

N/A 

N/A 

Identify further potential simplification and savings that could be achieved with a view to make the initiative more effective and efficient without 
prejudice to its policy objectives73. 

PART II: II Potential simplification and burden reduction (savings) 

Citizens/Consumers/Workers 

Businesses 

Administrations 

[Other…] _ specify 

Quantitative  

Comment 

Quantitative   Comment  Quantitative  Comment   Quantitative  Comment 

Description: 

Type: One-off / recurrent 
(select) 

N/A 

N/A 

N/A 

N/A 

75 

 
               
 
 
 
 
 
 
 
 
 
 
ANNEX V. STAKEHOLDERS CONSULTATION - SYNOPSIS REPORT  

Timing of consultation activities  

Date 

Actions 

December 2022 – December 2023  External  study  on  the  evaluation  of  the  DAC  for  the 
period 2018 – 2022  

May 2024 – July 2024  

Call for evidence and consultations: 

- 

call for evidence (feedback online via “Have your 
say” platform) 

-  open  public  consultation  (questionnaire  online 

via “Have your say” platform) 

-  questionnaire  on  the  functioning  of  the  DAC  to 

Member States 

-  questionnaire  on  the  relevance  of  DAC6 Annex 

IV to Member States 

Working Party IV on the evaluation of the DAC for the 
period 2018 – 2022, and DAC6 Annex IV 

Targeted  consultations  of  academics, 
economists 

lawyers  and 

September 2024 

September 2024 

December 2024 

Discussions in the Platform for tax good governance 

The stakeholder consultation activities carried out by the Commission, as shown in the table 
above,  involved  various  actions  and  the  engagement  of  multiple  stakeholders  to  cover  the 
widest possible range of interests, priorities, and experiences. These activities aimed to gather 
additional information to complement what the Commission already possessed regarding the 
DAC for the period 2018 – 2022, excluding the most recent amendments of DAC7 and DAC8.  

In the following paragraphs, key highlights of each action will be outlined. However, it should 
be  noted  that  the  contributions  received  during  the  stakeholder  consultation,  as  described 
hereafter,  cannot  be  considered  the  official  position  of  the  Commission  and  its  services. 
Therefore,  these  contributions  do  not  bind  the  Commission,  nor  can  they  be  regarded  as  a 
representative sample of the EU population. 

Stakeholders identified 

• 

Tax authorities: EU tax authorities are the primary entities responsible for exchanging 
information under the DAC. They also play a significant role in policy development. The 
evaluation  not  only  considered  the  general  opinions  of  EU  tax  authorities  on  each 
evaluation criterion but also gathered detailed input on specific elements of the DAC and 

76 

 
 
potential  improvements.  This  input  was  further  refined  through  tax  authorities’ 
participation  in  various  fora  including  regular  meetings  with  experts  and  the 
Commission74, and expert project groups supported by the Fiscalis programme (e.g., the 
VISDAC  project,  which  identified  best  practices  to  help  Member  States  enhance  data 
matching through an ongoing process, even when the data was not initially identified). 

Economic  operators:  the  exchange  of  information  system  involves  thousands  of 
economic operators who must comply with DAC rules by submitting information to tax 
authorities. These operators directly experience whether the proposed amendments to the 
DAC achieve the desired effects or whether changes to the rules have unintended negative 
impacts. The sectors covered include the ones impacted by the DAC provisions, such as 
the  financial  institutions  (DAC2),  MNEs  (DAC4,  DAC6),  intermediaries,  especially 
lawyers  and  tax  advisers  (DAC6)  and  digital  platforms  (DAC7).  Their  interests  vary 
significantly  depending  on  the  stakeholders  who  are  concerned  by  specific  reporting 
obligations, and size of business (large firms or SMEs). Representative organisations also 
play a crucial role due to their specialized knowledge of the technical issues at stake. 

Commission services: officials from DG TAXUD and other relevant DGs were invited 
to participate in an inter-service steering group (ISSG), which provided ongoing feedback 
on the study and facilitated consultation activities. Since the Commission played a key 
role  in  steering  the  study,  its  views  are  not  summarized  or  presented  in  this  synopsis 
report. 

EU citizens: EU citizens were also identified as relevant stakeholders and were invited 
to provide feedback through the “Have Your Say” platform on the Commission’s website. 
However,  very  few  citizens  participated,  making  it  impossible  to  draw  any  general 
conclusions from this group. 

• 

• 

• 

Consultation methods and tools 

Consultations with stakeholders are just one part of the overall evaluation methodology and 
tools described in Annex II. 

Stakeholders were consulted through several complementary methods designed to balance the 
breadth  and  representativeness  of  different  interests  and  priorities  with  the  need  for  highly 
detailed information. 

The  main  tools  used  during  the  consultation  activities  included  interviews  and  online 
questionnaires.  In  particular,  questionnaires  were  sent  to  all  EU  tax  authorities  and  made 
available  to  economic  operators  on  the  Commission’s  website  through  the  “Have  your  say” 
platform. Among economic operators, a diverse range of sectors and profiles were represented, 
covering industry groups, business associations, tax firms and individual companies. 

This comprehensive approach enhances confidence in the findings. However, it should be noted 
that most stakeholder input is not based on a statistically representative sample. 

External study on the evaluation of the DAC for the period 2018 – 2022  

74  Working Group ACDT and Subgroup-AEOI. 

77 

 
 
A study on the evaluation of the DAC for the period 2018 – 2022 was conducted by an external 
contractor from December 2022 to December 2023. 

In particular, a total of 162 stakeholders participated in the consultation by the contractor: 

- 

- 

- 

16 during the familiarization interviews; 

75 in interviews during the targeted consultation (including both private stakeholders and 
tax authorities); 

71 in the online survey. 

The targeted consultation covered various EU regions through a sampling strategy. The sample 
included a “core” group of 8 Member States75, in which the external contractor consulted both 
local tax authorities and private stakeholders, and an “extended” group of 6 additional Member 
States76, where interviews were conducted only with local tax authorities. 

As for the private stakeholders, the categories concerned reflected the sectors covered by the 
various DAC provisions, namely: 

- 

financial institutions, mostly relevant for DAC2; 

-  MNEs  and  large  enterprises,  primarily  affected  by  DAC  provisions  on  aggressive  tax 

planning, specifically DAC3/4/6; 

- 

intermediaries,  relevant  to  DAC  overall  in  relation  to  its  impact  on  compliance  and 
taxpayer behaviour. 

Call for evidence and public consultations 

As part of the evaluation and to reach a broader public audience, the Commission conducted a 
call for evidence and an open public consultation (OPC)77 via the “Have your Say” platform on 
its website, running from 7 May 2024 to 30 July 2024. 

In particular, the call for evidence allowed stakeholders to submit a written document in a free 
format, while the OPC consisted in the submission of a close-ended questionnaire structured in 
the following 3 main parts: 

- 

- 

- 

Part 1 – overall assessment of DAC; 

Part 2 – foreign income and assets; 

Part 3 – tax transparency. 

A  total  of  55  stakeholders  participated  in  the  consultation  process.  More  specifically,  28 
stakeholders and 2 citizens answered the OPC questionnaire focusing on AEOI that addressed 
the different instruments provided for in the DAC, while 25 stakeholders submitted their written 

75  France, Germany, Ireland, Italy, Spain, the Netherlands, Poland and Romania. 
76  Austria, Cyprus, Finland, Latvia, Luxembourg and Slovenia. 
77  The integral report of the call for evidence and the public consultation is published at this link: Cooperation 

on direct taxation - evaluation. 

78 

 
 
contributions  to  the  call  for  evidence78.  24  respondents  identified  themselves  as  “business 
associations” representing specific economic interests, whether in the legal and accountancy 
professions or in other areas of activity; 14 identified as “company or business”; 10 identified 
as  “other”  including  tax  intermediaries,  accountants,  or  advisors.  7  participants  identified 
themselves as 3 EU citizens, 2 NGOs and 2 academic research and institutions. 

Figure 26. Distribution by categories (OPC and call for evidence)  

The  distribution  by  category  of  activity  shows  that  tax  intermediaries,  accountants  or 
consultants are the most common category of respondents, with the highest representation (23) 
followed by large companies and businesses (10), banks, and other financial services (10). 

Figure 27. Distribution by categories and area of activity (OPC and call for evidence) 

In  terms  of  geographic  distribution,  Belgium  had  the  highest  participation  rate,  with  13 
respondents. One explanation for this is the concentration of business associations and lobby 
groups based in Brussels. 9 respondents originated in France, while Germany, the Netherlands 
and Ireland were all represented by 5 respondents each. Other EU countries (Austria, Czechia, 
Finland, Luxembourg, Malta, Sweden) are represented by smaller percentages of respondents. 

Questionnaire on the functioning of the DAC and the relevance of Annex IV of DAC6 to 
Member States 

78  The number of contributions as feedback differs from the statistics of the feedback online. As a matter of 
fact, 13 contributions were not included because they were the same contributions sent through the OPC 
Annex, and therefore are counted only once under OPC. 

79 

 
 
 
 
From May to July 2024, Member States were asked to respond to an updated questionnaire and 
invited to assess different aspects of Annex IV concerning the concept of the main benefit test 
(MBT)  and  the  hallmarks  provided  for  in  DAC6,  particularly  in  terms  of  clarity,  practical 
application, and efficiency. In addition, Member States were given the opportunity to suggest 
new categories of hallmarks if they had observed relevant cross-border arrangements that are 
not currently covered in Annex IV since the adoption of DAC6. 

A total of 26 Member States provided their feedback. 

Working Party IV on the evaluation of the DAC and DAC6 Annex IV 

On 21 September 2024, during a Working Party IV meeting, the Commission services presented 
to Member States the outcome of the external study supporting the DAC Evaluation, as well as 
the results of the OPC, the call for evidence, and the responses to the 2 questionnaires sent to 
Member  States.  The  meeting  allowed  the  Commission  services  to  gather  Member  States’ 
comments on the results and address a few other points of interest for the Commission. 

The analysis of the responses was presented in detail, highlighting the elements of Annex IV 
that some Member States believe should be improved. 

This analysis was supplemented by a presentation on the CJEU judgment on DAC6 (Case C-
623/22) to inform Member States of the potential consequences of this decision. 

Targeted consultations 

In September 2024, the  Commission  conducted a few  additional targeted consultations with 
academics,  tax  lawyers  and  economists  to  gather  their  comments  on  specific  aspects  of  the 
DAC, in order to complement the analysis on its effectiveness, efficiency, relevance, coherence, 
and EU added value.  

A questionnaire79 was distributed beforehand and during the discussions the experts provided 
their views and comments on the points of interests of the Commission. 

Meeting with academics and tax law experts 

On 25 September 2024, the Commission met with the following experts: Daniel Gutmann, Co-
director  of  the  Department  of  Sorbonne  Fiscalité  Finances  Publiques,  École  de  droit  de  la 
Sorbonne  (France),  avocat  au  Barreau  des  Hauts-de-Seine;  and  Denis  Emmanuel  Philippe, 
Lecturer at UL Liège; avocat au Barreau de Bruxelles. 

Meeting with economists 

On 26 September 2024, the Commission met with the following experts: Panayiotis Nicolaides, 
Director of Research at the EU Tax Observatory; and Jeanne Bomare, researcher at the EU Tax 
Observatory. 

Discussions in the Platform for tax good governance 

79  The list of questions addressed to the experts with the integral minutes can be found in Annexes XI and XII. 

80 

 
 
On  17  December  2024,  the  Commission  held  the  meeting80  of  the  Platform  for  tax  good 
governance  with  the  participation  of  representatives  from  different  EU  business  and 
professional  associations. The  aim  of  the  meeting,  among  others,  was  to  discuss  and  gather 
stakeholders’ views on the output of the DAC evaluation and the open public consultation.  

Results of consultation activities 

A  summary  of  the  consultation  activities  is  presented  below,  focusing  on  the  main  criteria 
assessed for the evaluation: effectiveness, efficiency, coherence, relevance and EU added value. 

• 

Efficiency 

Under the efficiency criterion, the study estimates both set-up and recurring adjustment costs 
and  burdens  for  private  and  public  stakeholders.  Annual  recurring  adjustment  costs  and 
administrative burdens from DAC are estimated at approximately EUR 650 million. 

From  a  distributional  perspective,  the  majority  (93%)  of  these  burdens  fall  on  private 
stakeholders.  In  2018–2019,  before  the  implementation  of  DAC6,  recurring  administrative 
burdens hovered around EUR 550 million. Following the introduction of DAC6, they increased 
to EUR 800–900 million. The costliest provision during this period was DAC2; however, costs 
tend to decrease over time. Estimates indicate that DAC6 was also relatively expensive in the 
reference period, mainly due to the initial compliance efforts. As for DAC4, it accounted for 
approximately 6% of total costs over the past 2 years. 

Recurring costs and burdens for tax authorities represent less than 7% of total costs. DAC1 and 
DAC2 generate the highest costs, while DAC3 is less costly, with DAC4 falling somewhere in 
between. Overall, the findings of the previous evaluation have been confirmed: implementation 
costs are significant when new DACs are introduced but tend to decrease and stabilize over 
time,  whereas  recurring  costs  increase.  The  costs  associated  with  non-AEOI  provisions  are 
relatively low, primarily due to their limited use, amounting to around EUR 1 million per year. 
These costs have further declined since 2020 due to reduced reliance on advanced cooperation 
mechanisms (PAOE and simultaneous controls), partly as a result of the COVID-19 pandemic. 
Finally, reporting costs for Member States to the Commission amount to approximately EUR 
140,000 per year, half of which is allocated to compiling the Yearly Assessment. 

Given the uncertainties in estimating benefits, the cost-benefit comparison is conducted across 
3 scenarios: 

- 

- 

- 

Comprehensive scenario: Based on the central estimates of all costs and benefits. 

Low-range scenario: Based on the lower-end estimates of all costs and benefits. 

Data-based scenario: Based only on data collected from stakeholders and tax authorities, 
excluding literature-based estimates of DAC4 benefits. 

According to the cost-effectiveness analysis, the recurring burdens associated with DAC are 
more than justified by the benefits generated. Across the different sensitivity scenarios, annual 

80 The integral report of the meeting of the Platform for good governance held on 17 December 2024 is 

available at this link: Platform for Tax Good Governance - Commission. 

81 

 
 
net benefits range between EUR 500 million and EUR 6.1 billion. Even when accounting for 
uncertainties related to DAC4’s impact, net benefits remain positive and substantial. Under the 
most conservative estimates—based solely on primary data from tax authorities—the benefits 
are at least twice the incurred burdens. In other scenarios, benefits exceed costs by a factor of 
8 to 10. 

• 

Effectiveness 

Tax  authorities  largely  agree  that  the  framework  established  by  the  Directive  facilitates 
administrative cooperation and appreciate the operational tools and systems it entails. They also 
confirm  that  the  interaction  among  different  provisions  and  tools  is  one  of  the  Directive’s 
strengths. 

The assessment of the Directive’s specific objectives begins with an analysis of the usability of 
exchanged  information  in  terms  of  completeness,  quality,  and  timeliness.  DAC1  and  DAC2 
exchanges  demonstrate  a  high  degree  of  completeness,  as  the  information  shared  includes 
detailed and granular data on both content and identifiers. The only notable exception is the 
inclusion of the TIN of the receiving country in DAC1 exchanges, which remains very low. 
Regarding DAC3 and DAC4, tax authorities have raised concerns about the varying quality of 
exchanged information. In particular, for DAC4, not all Member States are able to ensure that 
CbCRs  are  collected  from  local  MNEs,  which  may  affect  the  completeness  of  the  data.  No 
significant issues have emerged regarding the timeliness of exchanges. 

Between 23 and 25 countries systematically match DAC1 and DAC2 data, and most also match 
DAC3, DAC4, and DAC6 information. Matching rates are relatively high for DAC1 and DAC2, 
typically  covering  about  85–90%  of  received  information,  marking  an  increase  from  the 
previous evaluation, particularly in terms of automatic matching. Matching rates are also high 
and increasing  for DAC3 and DAC4, and matching  worked well for  DAC6 in  its first  year. 
Once matched, tax authorities use the information for various purposes. In recent years, all tax 
authorities  have  reported  using  DAC1  and  DAC2  information  for  tax  control  purposes, 
particularly for risk assessments and audits. DAC3 and DAC4 information is also used by most 
Member  States,  although  not  systematically  by  all.  Non-AEOI  tools  are  also  considered 
valuable for identifying tax fraud and evasion, particularly EOIR. 

AEOI,  particularly  DAC1  and  DAC2,  is  also  used  to  promote  spontaneous  tax  compliance 
through notifications, disclosures, and awareness campaigns. The evaluation also examines the 
extent to which DAC has influenced taxpayer behaviour. Feedback suggests that DAC has had 
a  deterrent  effect  on  individual  taxpayers,  although  quantifying  this  impact  with  precision 
remains challenging. Specifically, for DAC2, tax authorities report an increase in the disclosure 
of  financial  assets  abroad  and  the  taxes  paid  on  them.  However,  the  deterrent  effect  on 
corporations is perceived by stakeholders as less significant so far. The impact of DAC3 and 
DAC4 is often seen as part of broader international tax transparency efforts. Finally, DAC  - 
particularly DAC3 and, to a lesser extent, DAC4 and DAC6 - has the potential to enhance tax 
rule transparency. 

The Directive targets 3 interrelated general objectives. The first is safeguarding Member States’ 
tax revenues by increasing tax collection or recovery from taxpayers with income, assets, or 

82 

 
operations  in  multiple  Member  States  -  either  through  tax  control  measures  or  increased 
voluntary tax compliance. Despite the limitations of quantitative analysis, available evidence, 
supported by tax authorities and private stakeholders, suggests that the Directive effectively 
contributes to safeguarding tax revenues. Total tax benefits are estimated at approximately EUR 
6.8 billion per year. Although this figure is significant in absolute terms, it corresponds to only 
about 0.3% of EU direct tax revenue. DAC1 and DAC2 are widely credited with uncovering 
hidden tax bases and improving compliance through enforcement and deterrence. Together with 
non-AEOI  tools,  these  mechanisms  generate  approximately  EUR  1.2  billion  per  year  in 
additional tax assessments, based on data from tax authorities. While no data are available for 
DAC4,  economic  research  indicates  that  CbCRs  can  increase  MNEs’  effective  tax  rates. 
Although this effect is likely smaller for private CbCRs than for public ones, the scale of the 
issue suggests benefits in the range of several billion euros. 

The Directive also pursues 2 additional objectives: contributing to the smooth functioning of 
the Internal Market and increasing the fairness of the EU tax system. Both objectives are linked 
to  the  Directive’s  role  in  safeguarding  tax  revenues.  DAC  enhances  the  Internal  Market  by 
limiting  opportunities  for  tax  evasion  and  avoidance  among  cross-border  companies  and 
individuals, thereby reducing tax distortions. Additionally, it has helped harmonize reporting 
requirements for private sector operators, particularly under DAC2, DAC4, and – prospectively 
- DAC7. DAC also enhances the fairness of both EU and national tax systems. Although this 
impact  is  difficult  to  measure,  there  is  a  consensus,  supported  by  evidence,  that  DAC  has 
reduced opportunities for individuals and corporations to conceal tax bases abroad and avoid 
fair  taxation.  However,  DAC  alone  cannot  resolve  all  tax-related  challenges.  If  certain  tax 
practices or loopholes are not addressed by substantive tax laws, information exchange alone 
cannot  fully  mitigate the issue, regardless  of the  volume of data exchanged. In this context, 
DAC functions as one of several tools, alongside other EU and international initiatives, that 
contribute to ensuring a fairer tax system and appropriate revenue distribution among Member 
States. 

• 

Coherence 

DAC interacts with several EU and non-EU legal provisions. The Directive and its provisions 
align with other relevant EU initiatives, particularly those that establish similar instruments for 
administrative  cooperation  in  different  tax  areas  (e.g.,  VAT,  excises,  and  asset  recovery). 
However,  minor  inconsistencies  exist,  primarily  due  to  the  differing  objectives  of  other  EU 
directives,  such  as  the  AML  Directive  and  the  Anti-Tax  Avoidance  Directive  (ATAD). 
Nonetheless,  these  differences  have  not  resulted  in  serious  conflicts.  Instead,  significant 
synergies exist, such as between DAC2 and the AMLD. 

In some cases, the legal framework is criticised for appearing fragmented. For instance, digital 
platforms  are  subject  to  several  existing  and  upcoming  reporting  requirements  (e.g., Article 
242a of the VAT Directive and the Central Electronic System of Payment Information). Certain 
datapoints  required  under  these  frameworks  may  overlap  with  those  in  DAC7,  potentially 
leading  to  duplicated  efforts  and  increased  implementation  burdens. This  occurs  despite  the 
distinct  aims  and  scopes  of  the  legislations  -  while  DAC7  enables  Member  States  to  assess 
platform users’ income for direct taxation purposes, the VAT Directive and CESOP are primarily 

83 

 
designed to combat VAT fraud. Additionally, the introduction of national reporting rules may 
contribute to inconsistencies in the implementation of EU Directives, creating multiple layers 
of obligations. 

With  regard  to  international  initiatives,  DAC  also  demonstrates  a  relatively  high  degree  of 
coherence.  In  most  cases,  DAC  provisions  were  adopted  following  corresponding  OECD 
initiatives,  incorporating  definitions  and  operational  processes  directly.  The  best  examples 
include: 

- 

- 

- 

- 

DAC2 / Common Reporting Standard (CRS); 

DAC4  /  Base  Erosion  and  Profit  Shifting  (BEPS) Action  13  and  Country-by-Country 
Reporting (CbCR); 

DAC7 / Model Reporting Rules for Digital Platforms (MRDP); 

DAC8 / Crypto-Asset Reporting Framework (CARF). 

In other instances, EU provisions diverge from OECD model rules, though to varying degrees. 
For example, DAC3 differs slightly, whereas DAC6 presents more significant differences. In 
the case of DAC6, the lack of harmonization at the EU level, combined with deviations from 
the  OECD  Mandatory  Disclosure  Rules  (MDR),  has  led  to  uncertainty  among  private 
stakeholders and inconsistencies in national transposition. 

• 

Relevance 

The Directive aims to address 2 main challenges: the erosion of Member States’ tax bases due 
to increased globalization and the risk of an unharmonized policy response. Public and private 
stakeholders agree that these issues pose a problem for society. 

The problems covered by DAC provisions are not all equally significant in quantitative terms. 
Financial assets held by EU citizens in Member States other than their country of residence are 
substantial: deposits in financial institutions and investments in other EU countries amount to 
9% and 18%, respectively, of the gross financial assets held by EU residents. Profit shifting by 
multinational enterprises (MNEs) is also a major phenomenon. In 2018, MNEs with a parent 
jurisdiction  in  the  EU  accumulated  nearly  EUR  1,600  billion  in  profit  before  income  taxes. 
Estimates suggest that close to EUR 150 billion - approximately one-tenth of total profits and 
14% of foreign profits - were recorded in parent jurisdictions classified as offshore financial 
centres. According to the economics from the targeted consultations, these numbers are even 
bigger. As a matter of fact, 7 years after the launch of the BEPS actions and the introduction of 
CbCR, they have evidence that in 2022 the profits being shifted to offshore financial centres is 
of approximately USD 1 trillion, equivalent of 35% of profits booked by MNEs outside their 
headquarters’ jurisdiction. Corporate income tax losses remain significant, reaching up to 10% 
of global corporate tax revenues. However, economists provided evidence that without these 
measures, the situation would likely be worse, with even higher levels of BEPS activity. 

A  broader  concern  relates  to  the  use  of  information  exchanged  under  DAC. While  Member 
States  have  provided  proof  or  evidence  of  increasing  data  usage,  stakeholders  continue  to 
express concerns about the lack of transparency regarding how Member States utilize the data. 

84 

 
This  discrepancy  suggests  that  while  DAC  information  exchange  remains  relevant,  greater 
publicity and monitoring of its use are needed. 

Lastly,  a  key  issue  with  DAC4  is  the  ongoing  difficulty  tax  authorities  face  in  correctly 
identifying and monitoring reporting entities. 

In  contrast,  the  relative  significance  of  the  categories  of  income  covered  by  DAC1  appears 
much lower. Cross-border employees account for between 1% and 4% of the total workforce, 
with their income representing an average of 2% of total workforce compensation. Similarly, 
cross-border pensioners constitute 2% of the total pensioner population, and the amount paid 
to them represents 1.5% of total pension payments. 

Stakeholders have a generally positive view of the Directive’s fitness for purpose. The fitness 
analysis has been conducted for the various DAC tools, with very few issues have been reported 
concerning  non-AEOI  tools.  However,  regarding  the AEOI,  the  most  discussed  issue  is  the 
DAC6  reporting  requirements.  According  to  both  public  and  private  stakeholders,  several 
aspects  of  DAC6  are  neither  clearly  defined  nor  easily  applicable.  The  lack  of  clarity, 
exacerbated by the absence of guidelines endorsed by all Member States, allows for different 
interpretations and applications at the national level. On one hand, given that the provision was 
only  recently  introduced,  some  difficulties  may  be  considered  typical  implementation 
challenges. On the other hand, some provisions have emerged as problematic in themselves, 
particularly  concerning  the  definition  of  certain  hallmarks,  the  main  benefit  test,  and  the 
classification of intermediaries subject to reporting. 

Another issue relates to  the difficulties financial institutions face in  collecting and verifying 
clients’ foreign TINs for DAC2, particularly for pre-existing clients. More generally, identifying 
the tax residency of taxpayers remains challenging  for both  DAC1 and DAC2, as taxpayers 
may  struggle  to  report  it  correctly.  Regarding  DAC3,  issues  persist  with  the  summaries 
uploaded to the Central Directory, which, even when properly compiled, are often insufficient 
for risk assessment. To address this, a new template has been agreed upon with Member States 
and will be available as of 2024.  

A  broader  concern  relates  to  the  use  of  information  exchanged  under  DAC. While  Member 
States  have  provided  proof  or  evidence  of  increasing  data  usage,  stakeholders  continue  to 
express concerns about the lack of transparency regarding how Member States utilize the data. 
This  discrepancy  suggests  that  while  DAC  information  exchange  remains  relevant,  greater 
publicity and monitoring of its use are needed. 

Lastly,  a  key  issue  with  DAC4  is  the  ongoing  difficulty  tax  authorities  face  in  correctly 
identifying and monitoring reporting entities. 

• 

EU added value 

The assessment of the EU added value evaluates the extent to which the results achieved under 
DAC  are  additional  to  what  would  have  occurred  without  the  Directive.  Specifically,  it 
examines  whether  the  same  level  of  cooperation  could  have  been  achieved  solely  through 
bilateral agreements and existing OECD standards and actions. 

85 

 
All tax authorities agree that DAC is superior to international or national alternatives due to its 
binding  nature  under  EU  law,  its  underlying  IT  infrastructure,  and  its  uniform  reporting 
requirements  across  the  EU.  This  enables  larger-scale  exchanges  compared  to  international 
counterparts.  Additionally, EU funding - through the Fiscalis program - has played a crucial 
role in supporting the development of IT systems and facilitating more resource-intensive forms 
of administrative cooperation, such as PAOE and simultaneous controls.  

Private  stakeholders  share  a  similar  view.  However,  there  are  some  reservations  where 
implementation is not fully aligned among Member States, which could lead to fragmentation 
and, consequently, higher compliance costs (e.g., DAC6). 

86 

 
ANNEX VI. THE INTERVENTION LOGIC DIAGRAM  

87 

                                                                                                                                                                              Needs eneralObjectives                                                                                                                                                       pecificObjectives                                                                                                                                                                                InputsEuropean Commission                                                                                    .                                    ember  tates                                                                                                                                      rivate  ector                                                                                           iscalis ActionsAEOI                                     DAC   DAC2                                          DAC              DAC4                                        DAC                                DAC  Other forms of ACDT                            DAC                                                                       EOIR  EOIActivitiesOutput se of otherforms of ACDT         otherinformationexchanges                        AEOIResults                                                                                                                Improved functioningof the internal market erception of fairertax s stem tronger safeguard of ember  tates taxbase and revenuesImpactOther E   olicies                                                               External  actors                                                                                                                                                         
 
ANNEX VII. LEGAL DEVELOPMENTS FROM 2018 

Transposition: overview of infringement procedures  

As summarized in the table below, during the period of the present evaluation, the DAC 
transposition process has led to a total of, respectively, 88 infringement procedures for non-
communication, and 8 infringement procedures for non- or partial compliance. At the time 
of publication of this document, all infringement procedures have been closed, except for 
5 related to DAC7. Notably, none of these cases has (yet) been referred to the Court. 

Figure 28. Overview of infringement procedures 

DAC provision

Deadline for transposition

# of infringement 
procedures for non-
communication

# of infringement 
procedures for non- or 
partial compliance

DAC1 AEOI

DAC1 non-AEOI

DAC2

DAC3

DAC4

DAC5

DAC6

DAC7

31 December 2014

31 December 2012

31 December 2015

31 December 2016

4 June 2017

31 December 2017

31 December 2019

31 December 2022

4

12

13

9

8

11

15

None

1

2

None

1

None

None

16 (4 open)

4 (1 open)

Source: Ramboll study and DG TAXUD data 
Although most non-communication cases were closed shortly after the procedures were 
opened,  delays  in  communicating  successful  transposition  often  reflect  actual  delays  in 
adopting national laws. In particular, the majority of cases (15) involved late notification 
or non-notification by Member States regarding DAC6 transposition.  

This pattern reflects the fact that some Member States struggle to keep pace with frequent 
Directive  amendments  and  face  technical  challenges  linked  to  the  expansion  of AEOI, 
further exacerbated by resource constraints. 

CJUE Cases on DAC 

• 

Legal professional privilege 

There  have  been  CJUE  Cases  concerning  legal  professional  privilege,  mostly  from  the 
point of view of DAC6 reporting requirements.  

The  Court  has  first  discussed  the  issue  in  the  case  C-694/2081  and  ruled  against  the 
obligation set out in Article 8ab(5) of DAC for a lawyer acting as intermediary and exempt 
from the reporting obligation to notify without delay any other intermediary who is not 

81  C-694/20 - 08/12/2022 - Orde van Vlaamse Balies e.a. 

88 

 
 
 
 
their client of that intermediary’s reporting obligations. The Court held that this provision 
should  be  invalid  in  the  light  of Article  7  of  the  Charter  of  Fundamental  Rights  of  the 
European Union, in so far as the Member States’ application of that provision had the effect 
of requiring a lawyer acting as an intermediary to breach the confidentiality obligations to 
which it was legally bound. 

This was later addressed in legislation, and an amendment was adopted by the Council in 
the  context  of  DAC8  to ensure  that  the  notification  system  initially  provided  for  in  the 
Directive  would  be  modified  according  to  the  decision  of  the  Court.  It  introduced  the 
concept of lawyer’s “client”, who is entitled to receive a notification from a lawyer bound 
by  legal  professional  privilege,  thereby  making  Article  8ab(5)  compatible  with  the 
Charter82. 

A  second  case,  where  legal  professional  privilege  was  discussed  was  case  C-623/2283, 
where  the  Court  ruled  that  the  invalidity  of Article  8ab(5)  declared  by  the  Court  in  the 
ruling of 8 December 2022, applies only to persons who pursue their professional activities 
under  one  of  the  professional  titles  referred  to  in Article  1(2)(a)  of  Directive  98/584.  It 
confirmed  the  previous  ruling  and  specified  that  the  privilege  only  applies  to  lawyers 
authorised under national law to ensure legal representation of their clients. 

The third time the Court was faced with the question of the extent of legal professional 
privilege in  the context  of DAC was case C-432/23,  which did  not  relate to  DAC6 but 
rather  to  exchange  of  information  on  request  (EOIR).  This  judgment  reconfirmed  that 
lawyers enjoy strengthened protections of communication with their clients under Article 
7  of  the  Charter  of  Fundamental  Rights  of  the  European  Union,  also  regarding 
documentation that may be requested under DAC by national tax authorities.  

The  Court  did  not  find  any  inconsistencies  between  the  DAC  and  the  Charter  of 
Fundamental  Rights  but  stressed  that  a  decision  requiring  a  lawyer  to  provide  the 
authorities of the requested Member State – for the purposes of an exchange of information 
on request in accordance with DAC – with all the documentation and information relating 
to his or her relations with his or her client, concerning such legal advice, constitutes an 
interference with the right to respect for communications between lawyers and their clients 
guaranteed by Article 7 of the Charter. 

82  Council Directive (EU) 2023/2226 of 17 October 2023 amending Directive 2011/16/EU on 

administrative cooperation in the field of taxation: Article 8ab is amended as follows: (a) in paragraph 
5, the first subparagraph is replaced by the following: ‘5. Each Member State may take the necessary 
measures to give intermediaries the right to a waiver from filing information on a reportable cross-
border arrangement where the reporting obligation would breach the legal professional privilege under 
the national law of that Member State (unchanged) In such circumstances, each Member State shall 
take the necessary measures to require any intermediaries that have been granted a waiver to notify, 
without delay, their client, if that client is an intermediary or, where there is no such intermediary, that 
client is the relevant taxpayer, of that client’s reporting obligations under paragraph 6.’ 

83  Belgian Association of Tax Lawyers, C-623/22  
84  Directive 98/5/EC of the European Parliament and of the Council to facilitate practice of the 

profession of lawyer on a permanent basis in a Member State other than that in which the qualification 
was obtained. 

89 

 
 
• 

Infringement of equal treatment and legal certainty 

In  its  ruling  of  29  July  2024  (C-623/22),  the  court  also  ruled  on  issues  other  than 
professional  secrecy  and  legal  professional  privilege.  In  practice,  the  questions  of  i) 
possible infringement of equal treatment (in so far as DAC6 does not limit the reporting 
obligation to corporation tax, but makes it applicable to all taxes falling within its scope) 
and ii) possible infringement of legal certainty (due to the terminology and concepts used 
in DAC6 e.g., “arrangement”, “intermediary”, “participant”, and starting point prescribed 
for fulfilling reporting obligations) were examined by the Court.  On the first  point, the 
CJEU  found  that  the  different  tax  types  subject  to  the  reporting  obligations  fall  within 
comparable situations in the light of the objectives of the DAC, and the legislation was not 
inappropriate. On the second point, by analysing the various aspects of the concepts used 
in DAC6, the Court held that the degree of precision and clarity did not call into question 
the validity of DAC6. 

• 

Conclusions 

While the Court has generally found the system to be coherent with fundamental rights, it 
has overturned one provision in order to provide greater protection for legal professional 
privilege (LPP)85 and then introduced a more restrictive interpretation of that privilege86. 
It appears that in the latter decision (C-623/22, July 2024), the analysis of the application 
of  legal  professional  privilege  under  DAC6  by  the  Court  seems  to  create  3  different 
categories of intermediaries, with rights that are not similar: the non-lawyer intermediary 
(who  cannot  ensure  legal  representation  of  their  client  in  court)  subject  to  reporting 
obligations,  no waiver applicable; the  non-lawyer  intermediary bound by LPP who has 
mandate  to  ensure  legal  representation  of  their  client  in  court,  who  benefits  from  the 
waiver, and must notify other intermediaries and/or their client; the lawyer intermediary 
who ensures legal representation of their client and who benefits from the waiver due to 
LPP, and has no obligation in terms of notification, except to their client. 

The  restrictive  interpretation  of  the  LPP  seems  to  dismiss  the  use  of  the  concept  of 
‘professional  secrecy’  for  the  application  of  the  waiver  in  article  8ab(5),  which  may, 
depending on the Member State, create a difference in treatment between lawyers and other 
intermediaries concerned by DAC6 obligations. The conclusions of the CJEU highlight the 
importance of ensuring legal certainty and show that the system in place is not flawless. It 
also notes the disparate interpretations of the concept among Member States.  

In fine, the legal soundness of the framework has proved particularly relevant and robust 
over time despite attacks on the Directive's lawfulness, as confirmed by the decisions of 
the Court of Justice of the European Union which have stated the relevance of the general 

85  Orde Van Vlaamse Balies e.a., C-694/20 
86  Belgian Association of Tax Lawyers, C-623/22 

90 

 
 
approaches of the DAC, upholding its legality87. However, it shows a recurring point of 
vulnerability on the LPP issue. 

87  In Case C‑623/22, the Court of Justice of the European Union considered DAC valid considering the 
principles of legal certainty, legality in criminal matters and the right to respect for private life as 
provided for in the article 7 of the Charter (EU charter of fundamental rights). It also considered that 
DAC does not infringe the principles of equal treatment and non-discrimination in extending the 
reporting obligations of certain provisions to any type of tax subject to potentially aggressive tax 
planning. It has been confirmed in Case C-432/23 DAC, the Court considering that DAC is compatible 
with articles 7 and 52(1) of the EU charter. 

91 

 
 
 
ANNEX VIII. DAC6 HALLMARKS 

1.  Background 

DAC6:  Council  Directive  (EU)  2018/822  of  25  May  2018  amending  Directive 
2011/16/EU as regards mandatory automatic exchange of information in the field of 
taxation in relation to reportable cross-border arrangements 

In order to tackle aggressive tax planning and help the Member States to identify possible 
loopholes  that  are  exploited  by  taxpayers  to  avoid  taxes,  DAC6  establishes  mandatory 
disclosures rules that apply on “reportable cross-border arrangement”, i.e. any cross-border 
arrangement containing at least one of the hallmarks set out in Annex IV of the DAC. 

The EU nexus in DAC6 

The arrangements concerned by DAC6 mandatory disclosures rules must have a link 
with the EU  

They  may  concern  either  more  than  one  Member  State  or  a  Member  State  and  a  third 
country where at least one of the following conditions is met: (a) not all of the participants 
in the arrangement are resident for tax purposes in the same jurisdiction; (b) one or more 
of the participants in the arrangement is simultaneously resident for tax purposes in more 
than one jurisdiction; (c) one or more of the participants in the arrangement carries on a 
business  in  another  jurisdiction  through  a  permanent  establishment  situated  in  that 
jurisdiction and the arrangement forms part or the whole of the business of that permanent 
establishment; (d) one or more of the participants in the arrangement carries on an activity 
in  another  jurisdiction  without  being  resident  for  tax  purposes  or  creating  a  permanent 
establishment situated in that jurisdiction; (e) such arrangement has a possible impact on 
the automatic exchange of information or the identification of beneficial ownership.  

The reporting person, called ‘intermediary’, must also have a link with the EU  

It is any person that designs, markets, organises or makes available for implementation or 
manages  the  implementation  of  a  reportable  cross-border  arrangement,  including  any 
person  that  provides  aid,  assistance  or  advice  in  the  matter.  Intermediaries  must  be  tax 
resident  in  the  EU  or  have  a  permanent  establishment  in  the  EU  that  is  providing  the 
services linked with the arrangement or be incorporated by the laws of one of the Member 
States of the EU, or registered with a professional association related to legal, taxation or 
consultancy services in the EU. On this category of professionals also known as “lawyers”, 
DAC6  provides  for  a  waiver  from  filing  information  on  a  reportable  cross-border 
arrangement where the reporting obligation would breach the legal professional privilege 
under the national law of that Member State.  

Finally, the EU nexus applies to the taxpayer as well, as any person to whom a reportable 
cross-border arrangement is made available for implementation (“relevant taxpayer”). 

While  the  reporting  obligation  lies  in  principle  on  the  intermediary  or  on  the  chain  of 
intermediaries involved in the arrangement, the application of the waiver may lead to shift 

92 

 
this obligation to the taxpayer. Such information shall then be filed by the taxpayer under 
certain  conditions,  i.e.  only  with  the  competent  authorities  of  the  Member  State  that 
features  first  in  the  list  following:  (a)  the  Member  State  where  the  relevant  taxpayer  is 
resident  for  tax  purposes;  (b)  the  Member  State  where  the  relevant  taxpayer  has  a 
permanent establishment benefiting from the arrangement; (c) the Member State where the 
relevant taxpayer receives income or generates profits, although the relevant taxpayer is 
not resident for tax purposes and has no permanent establishment in any Member State; 
(d)  the  Member  State  where  the  relevant  taxpayer  carries  on  an  activity,  although  the 
relevant taxpayer is not resident for tax purposes and has no permanent establishment in 
any Member State. 

Annex  IV  and  hallmarks  in  DAC6:  the  key  factor  to  identify  a  reportable  cross-
border arrangement 

The  hallmarks  are  the  characteristics  or  features  of  a  cross-border  arrangement  that 
presents an indication of a potential risk of tax avoidance, as listed in Annex IV.  

As the hallmarks are part of the set of information to be communicated by the competent 
authority of Member States, they are paramount to determine whether an arrangement is 
reportable  or  not.  In  this  regard,  the  intermediaries  or  the  taxpayers  have  to  use  the 
hallmarks  to  differentiate  the  nature  of  the  arrangements  that  may  be  concerned  by  the 
reporting obligation. 

Some of these hallmarks are combined with a complementary factor, known as the ‘main 
benefit  test’  to  characterise  certain  generic  hallmarks,  or  certain  specific  categories  of 
hallmarks corresponding to different types of transaction.  

Annex IV to amended Directive 2011/16 (‘Annex IV’), entitled ‘Hallmarks’, provides for a 
main benefit test and lists categories of hallmarks as follows: 

Part I. Main benefit test 

Generic hallmarks under category A and specific hallmarks under category B and under points (b)(i), (c) and 
(d) of paragraph 1 of category C may only be taken into account where they fulfil the “main benefit test”. 

That test will be satisfied if it can be established that the main benefit or one of the main benefits which, 
having  regard  to  all  relevant facts  and  circumstances,  a  person  may reasonably  expect  to  derive from  an 
arrangement is the obtaining of a tax advantage. 

In the context of hallmark under paragraph 1 of category C, the presence of conditions set out in points (b)(i), 
(c) or (d) of paragraph 1 of category C cannot alone be a reason for concluding that an arrangement satisfies 
the main benefit test. 

Part II. Categories of hallmarks 

A. Generic hallmarks linked to the main benefit test 

1. An arrangement where the relevant taxpayer or a participant in the arrangement undertakes to comply with 
a condition of confidentiality which may require them not to disclose how the arrangement could secure a 
tax advantage vis-à-vis other intermediaries or the tax authorities. 

2. An arrangement where the intermediary is entitled to receive a fee (or interest, remuneration for finance 
costs and other charges) for the arrangement and that fee is fixed by reference to: 

93 

 
(a) the amount of the tax advantage derived from the arrangement; or 

(b) whether or not a tax advantage is actually derived from the arrangement. This would include an obligation 
on the intermediary to partially or fully refund the fees where the intended tax advantage derived from the 
arrangement was not partially or fully achieved. 

3. An arrangement that has substantially standardised documentation and/or structure and is available to more 
than one relevant taxpayer without a need to be substantially customised for implementation. 

B. Specific hallmarks linked to the main benefit test 

1. An arrangement whereby a participant in the arrangement takes contrived steps which consist in acquiring 
a loss-making company, discontinuing the main activity of such company and using its losses in order to 
reduce  its  tax  liability,  including  through  a  transfer  of  those  losses  to  another  jurisdiction  or  by  the 
acceleration of the use of those losses. 

2. An arrangement that has the effect of converting income into capital, gifts or other categories of revenue 
which are taxed at a lower level or exempt from tax. 

3. An  arrangement  which  includes  circular  transactions  resulting  in  the  round-tripping  of  funds,  namely 
through involving interposed entities without other primary commercial function or transactions that offset 
or cancel each other or that have other similar features. 

C. Specific hallmarks related to cross-border transactions 

1. An arrangement that involves deductible cross-border payments made between two or more associated 
enterprises where at least one of the following conditions occurs: 

(a) the recipient is not resident for tax purposes in any tax jurisdiction; 

(b) although the recipient is resident for tax purposes in a jurisdiction, that jurisdiction either: 

(i) does not impose any corporate tax or imposes corporate tax at the rate of zero or almost zero; or 

(ii) is included in a list of third-country jurisdictions which have been assessed by Member States collectively 
or within the framework of the [Organisation for Economic Cooperation and Development (OECD)] as being 
non-cooperative; 

(c) the payment benefits from a full exemption from tax in the jurisdiction where the recipient is resident for 
tax purposes; 

(d) the payment benefits from a preferential tax regime in the jurisdiction where the recipient is resident for 
tax purposes; 

2. Deductions for the same depreciation on the asset are claimed in more than one jurisdiction. 

3. Relief from double taxation in respect of the same item of income or capital is claimed in more than one 
jurisdiction. 

4. There is an arrangement that includes transfers of assets and where there is a material difference in  the 
amount being treated as payable in consideration for the assets in those jurisdictions involved. 

D. Specific hallmarks concerning automatic exchange of information and beneficial ownership 

1. An  arrangement  which  may  have  the  effect  of  undermining  the  reporting  obligation  under  the  laws 
implementing  Union  legislation  or  any  equivalent  agreements  on  the  automatic  exchange  of  Financial 
Account information, including agreements with third countries, or which takes advantage of the absence of 
such legislation or agreements. Such arrangements include at least the following: 

(a) the use of an account, product or investment that is not, or purports not to be, a Financial Account, but 
has features that are substantially similar to those of a Financial Account; 

(b)  the  transfer  of  Financial Accounts  or  assets  to,  or  the  use  of  jurisdictions  that  are  not  bound  by  the 
automatic exchange of Financial Account information with the State of residence of the relevant taxpayer; 

94 

 
(c) the reclassification of income and capital into products or payments that are not subject to the automatic 
exchange of Financial Account information; 

(d) the transfer or conversion of a Financial Institution or a Financial Account or the assets therein into a 
Financial Institution or a Financial Account or assets not subject to reporting under the automatic exchange 
of Financial Account information; 

(e) the use of legal entities, arrangements or structures that eliminate or purport to eliminate reporting of one 
or  more  Account  Holders  or  Controlling  Persons  under  the  automatic  exchange  of  Financial  Account 
information; 

(f) arrangements that undermine, or exploit weaknesses in, the due diligence procedures used by Financial 
Institutions to comply with their obligations to report Financial Account  information, including the use of 
jurisdictions with inadequate or weak regimes of enforcement of anti-money-laundering legislation or with 
weak transparency requirements for legal persons or legal arrangements. 

2. An arrangement involving a non-transparent legal or beneficial ownership chain with the use of persons, 
legal arrangements or structures: 

(a) that do not carry on a substantive economic activity supported by adequate staff, equipment, assets and 
premises; and 

(b)  that  are  incorporated,  managed,  resident,  controlled  or  established  in  any  jurisdiction  other  than  the 
jurisdiction of residence of one or more of the beneficial owners of the assets held by such persons, legal 
arrangements or structures; and 

(c) where the beneficial owners of such persons, legal arrangements or structures, as defined in Directive 
(EU) 2015/849 [of the European Parliament and of the Council of 20 May 2015 on the prevention of the use 
of the financial system for the purposes of money laundering or terrorist financing, amending Regulation 
(EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of 
the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ 2015 L 141, p. 73)], 
are made unidentifiable. 

E. Specific hallmarks concerning transfer pricing 

1. An arrangement which involves the use of unilateral safe harbour rules. 

2. An arrangement involving the transfer of hard-to-value intangibles. The term “hard-to-value intangibles” 
covers  intangibles  or  rights  in  intangibles  for  which,  at  the  time  of  their  transfer  between  associated 
enterprises: 

(a) no reliable comparable exist; and 

(b) at the time the transaction was entered into, the projections of future cash flows or income expected to be 
derived  from  the  transferred  intangible,  or  the  assumptions  used  in  valuing  the  intangible  are  highly 
uncertain,  making  it  difficult  to  predict  the  level  of  ultimate  success  of  the  intangible  at  the  time  of  the 
transfer. 

3. An arrangement involving an intragroup cross-border transfer of functions and/or risks and/or assets, if 
the projected annual earnings before interest and taxes (EBIT), during the three-year period after the transfer, 
of  the  transferor  or  transferors,  are  less  than  50%  of  the  projected  annual  EBIT  of  such  transferor  or 
transferors if the transfer had not been made.’ 

95 

 
 
 
Evaluation of the DAC and the Annex IV 

Legal Framework 

According to Article 27(2) of DAC6 “every two years after 1 July 2020, the Member States 
and the Commission shall evaluate the relevance of Annex IV and the Commission shall 
present a report to the Council. That report shall, where appropriate, be accompanied by a 
legislative proposal”. In view of that evaluation, the Commission consulted the Member 
States on Annex IV through a questionnaire in 2022. Member States’ feedback have been 
processed in the context of the study carried out by an external contractor for the evaluation 
of the DAC. 

In 2023, the Council decided to align the timeline of the assessment of Annex IV with the 
DAC  evaluation  which  led  to  the  deletion  of Article  27(2).  Consequently,  not  only  the 
Annex IV but all the provisions of DAC6 are subject to the evaluation of the DAC which 
is currently underway.  

Key figures on DAC6 reporting and distribution of hallmarks 

The vast majority of potentially tax-harmful cross-border arrangements reported between 
2020 and 2023 in the dedicated central directory originates from a few Member States: 
Germany, the Netherlands, Cyprus, Luxembourg, Ireland and Poland. 

Figure 29: Total number of DAC6 arrangements per Member State (2020-2023) 

Source: EC statistics 

The  distribution  of  hallmark  by  arrangement  reported  in  the  central  directory  is  fairly 
uneven over time.  

Hallmarks A  (generic  hallmarks  linked  to  the  main  benefit  test,  35%)  and  B  (specific 
hallmarks linked to MBT, 34%) are very widely mentioned. In comparison, hallmarks C 
(linked to cross-border transactions, 15%) and E (transfer pricing, 12%) are used less often. 
It  should  be  noted  that  hallmarks  D  (linked  to  arrangements  aimed  at  avoiding AEOI 
obligations and concealing the BO), which also appear in the OECD’s MDR, account for 
only 4% of the hallmarks mentioned. 

96 

 
 
 
 
 
Figure 30: Distribution of hallmarks identified in arrangements reported 

Distribution of hallmarks identified in arrangements reported
(several hallmarks per arrangement possible)

12%

4%

16%

35%

34%

Hallmarks A (total) Hallmarks B (total) Hallmarks C (total)

Hallmarks D (total) Hallmarks E (total)

Source: EC statistics (2021-2024) 

Methodology and fact-finding 

The replies to the 2022 questionnaire to the Member States on Annex IV were considered 
in the context of the study commissioned by the Commission.  

The subsequent public consultation and call for evidence that run between May and July 
2024 included specific questions relating to the DAC6 and, more specifically, to hallmarks. 
Stakeholders  and  professional  organisations  were  also  given  the  opportunity  to  submit 
contributions in the light of the evidence gathered since the beginning of the exchange of 
information in July 2020 for 3 Member States, and April 2021 for the remainders88. 

In addition, in May 2024, Member States were asked to reply to an updated questionnaire 
and to assess different features of Annex IV related to the concept of main benefit test and 
to hallmarks, in terms of clarity, actual application, and efficiency.   

•  Opinion of private stakeholders: results of the study, public consultation/call 

for evidence and targeted consultations 

Tax intermediaries (business associations, lawyers, or companies) which are subject to the 
disclosure rules under DAC6 were critical about  the impact that DAC6 had in terms of 
increased burden on reporting entities. They pointed out that DAC6 led to the analysis of 
substantial volumes of information, with significant impact in terms of human resources 
and IT developments for reporting entities. 

They also complained about the lack of harmonised guidance on definitions, the ‘broad 
scope’ of the Directive, the ‘lack of precision’ and ‘clarity’ of certain hallmarks. 

As  showed  in  the  tables  below,  the  DAC6  is  generally  perceived  as  complex  or  very 
complex, with differences in implementation across Member States and the definition of 

88  A total of 55 stakeholders participated in the consultation process. More specifically, 28 stakeholders 
and 2 NGOs answered the public consultation based on a questionnaire focusing on AEOI that 
addressed the different instruments provided for in the DAC. The Commission also received 25 written 
feedback contributions to the call for evidence. 

97 

 
 
 
the “main benefit test” and hallmarks (especially some of them, e.g. hallmark A1 regarding 
confidentiality clauses; hallmark A3 regarding standardised documentation; hallmark B2 
regarding  the  conversion  of  income;  hallmark  C1b(i)  regarding  the  “subject  to  zero  or 
almost zero tax rate” condition) being particularly challenging for stakeholders. 

Figure 31: Elements of DAC6 generating complexity 

Respondents: 7 (Difficulties in obtaining advice from tax advisor); 9 (number of arrangements to be 
screened; description of hallmarks; determination of reportable arrangements; 8 (differences in 
implementation across EU Member States) 
Source: open public consultation, 2024. 

Moreover, although the wording of the hallmarks is the same in all Member States, private 
stakeholders noted that their interpretation may diverge from one tax authority to another, 
which may result in  a different  application of the Directive within the EU. This further 
adds  administrative  burden  to  intermediaries  and  taxpayers  as  well  as  increases  legal 
uncertainty. 

Figure 32: Hallmarks’ clarity and applicability 

Respondents: 10. Source: open public consultation, 2024. 

98 

 
 
 
 
These  findings  are  consistent  with  the  replies  provided  by  respondent  to  the  public 
consultation  questions  on  possible  proposals  to  improve  the  functioning  of  DAC6. 
Respondents  generally  stressed  the  need  for  more  detailed  and  practical  guidance 
(including operational examples) on each hallmark to be endorsed by Member States and 
published by the Commission. Guidance should provide a detailed description and clarify 
the conditions of application of each hallmark. Stakeholders also strongly supported the 
systematic collection and provision  of participants’ tax identification numbers, with  the 
inclusion  of  mandatory  elements  in  the  DAC6  summary,  reflecting  a  call  for  a  more 
harmonised reporting. Harmonising penalties to ensure proportionality and effectiveness 
was moderately supported, underscoring the importance of fair and effective enforcement. 
On the contrary, there was less support for adding further detailed hallmarks, suggesting 
that  stakeholders  favour  a  balanced  approach  that  avoids  excessive  complexity  and 
administrative burden. 

Figure 33: Relevance of possible proposals concerning DAC6 

Source: open public consultation, 2024. 

In addition, during targeted consultations, several private stakeholders stressed the need to 
reassess the hallmarks in the light of the current international tax framework as well as of 
the concrete application of DAC6, to establish if they are still relevant and fit-for purposes. 
They advised the Commission services to prioritise the elimination of certain hallmarks 
that no longer serve a clear purpose, rather than redesigning the existing hallmarks, with a 
view to achieving simplification and burden reduction. 

It must be noted that these comments were gathered before the judgement of the Court of 
Justice of the European Union in the case C-623/22 Belgian Association of Tax Lawyers 
and Others (July 2024) which upheld DAC6 and did not judge that a possible lack of clarity 
in the definitions of hallmarks was an obstacle to its application. They were also collected 

99 

 
 
before the ECA report on the tax harmful regimes (November 2024), that called for more 
guidance from the Commission, especially on Annex IV and hallmarks. 

•  Opinion of Member States: results of questionnaire and interviews 

A thorough analysis of the hallmarks was carried out by the Member States in reply to the 
2 questionnaires sent by the Commission services. Moreover, DAC6 and, more specifically 
the hallmarks, were discussed with the Member States during a number of interviews. The 
main conclusions are summarised below. 

As regards clarity, most of the concepts and hallmarks used in Annex IV are considered to 
be sufficiently clear by most Member States. In addition, most of the Member States have 
not identified major issues in terms of application. However, between a quarter and a third 
of  the  Member  States  is  of  the  view  that,  in  some  circumstances,  the  concept  of  main 
benefit test, as well as some hallmarks (A3, B2, B3, C4, E2 and E3) are not sufficiently 
clear.  They  may  be  too  broad  or  being  subject  to  divergent  interpretations  which  raise 
questions about their application in terms of efficiency. 

If most of the concepts and hallmarks of DAC6 are seen as useful both for tax risk analysis 
and for the detection of legal loopholes, their effectiveness may be questioned. However, 
most Member States do not wish to see them removed from Annex IV. 

The large majority of the Member States has established guidance for cases deemed the 
most  complicated  (e.g.  main  benefit  test),  yet  not  built  on  common  guidelines,  which 
makes differences of interpretation of hallmarks possible. 

Member States,  therefore, generally uphold  the relevance of  DAC6 Annex IV as a tool 
aimed  at  identifying  potentially  aggressive  cross-border  arrangements,  but  ask  for 
improvements in terms of the definitions, examples and concrete application of hallmarks 
to make it more efficient. As regards possible future action with respect to cases presenting 
possible issues, the option of amending the Directive received limited support by Member 
States.  On  the  other  hand,  Member  States  favoured  close  cooperation  with  the 
Commission, in order to establish common guidance. 

Finally, Member States made limited but targeted proposals for new hallmarks, targeting 
hybrid  arrangements,  structured  real-estate  arrangements  using  opaque  entities,  or 
potentially harmful arrangements based on the use of crypto assets. 

Impact of the judgement of the CJEU in case C-623/22 (30 July 2024) 

Clarity of the concepts: overall conclusions 

Overall, the Court concluded that the so-called ‘broad scope’ of the reporting obligations 
under DAC6 is appropriate, given the objectives of DAC6 and the EU legislator's broad 
discretion in these matters. Consequently, the Court ruled that its scope does not affect the 
legality of DAC6. 

The Court also assessed that the terms (e.g. ‘arrangements’) and deadlines challenged by 
the lawyers ‘association. In each instance, the CJEU determined that the provisions met 

100 

 
the requirements of clarity and precision, referring to the definitions provided in DAC6, 
and  suggested  interpretations  based  on  the  common  usage  of  the  terms,  internationally 
accepted practices, or the OECD’s Model Mandatory Disclosure Rules for CRS Avoidance 
Arrangements and Opaque Offshore Structures (2018) 89. 

Annex IV and the CJEU’s comments: 

On hallmarks, the Court concluded that they are not drafted in such a way as to make the 
application  of  the  reporting  obligation  unforeseeable  for  the  persons  subject  to  this 
obligation. 

Regarding the question of the subjectivity of the main benefit test, that applies with certain 
hallmarks, the CJEU stated that it does not appear particularly difficult for an intermediary 
and, in the absence of an intermediary bound by the reporting obligation, for the relevant 
taxpayer, to decide whether the main benefit or one of the main benefits that can reasonably 
be expected of the arrangement they design and/or use is fiscal in nature.  

The Court referenced the BEPS Action 12 Report, which indicates that the main benefit 
test involves comparing  the expected tax advantage with  other potential benefits  of the 
transaction, concluding that it requires an objective assessment of the tax benefits. 

The most relevant parts of the Judgement in that respect are paragraphs 53, 56, 57, 59, 64, 
75 and 86. 

Conclusions of the European court of auditors (28 November 2024) 

The special report published by the European Court of Auditors (ECA) on 28 November 
2024 assessed the appropriateness of measures and mechanisms employed in the EU by 
both the Commission and 5 EU Member States (Ireland, Cyprus, Luxembourg, Malta, and 
the Netherlands).  

In  particular,  the  ECA  focused  on  the  design  and  implementation  of  the  following  3 
directives that seek to curb harmful tax practices: the Anti-Tax Avoidance Directive, the 
5th amendment to the Directive on administrative cooperation in the field of taxation (DAC 
6) and the Directive on Tax Dispute Resolution Mechanisms. The audit covered the period 
from 2019 to 2023. 

Overall, the ECA found that the established EU framework serves as a necessary first line 
of defence to support the fight against harmful tax regimes and corporate tax avoidance 
within the limited scope of the EU’s competences in matters of direct taxation. However, 
ECA  criticised  several  points  in  terms  of  implementation  by  the  Member  States  and 
monitoring by the European Commission, stressing the lack of guidance from the part of 
the Commission which would clarify the application of the EU rules in practice. 

89  Best practices recommended by the BEPS action 12 led to the Model Mandatory Disclosure Rules for 
Addressing CRS Avoidance Arrangements and Opaque Offshore Structures | OECD iLibrary (oecd-
ilibrary.org) 

101 

 
 
Although Member States have tools available for exchanging information on potentially 
harmful  cross-border  tax  arrangements,  they  carry  out  few  quality  checks  on  reported 
information and make little use of the information received, which makes the fight against 
tax avoidance and tax evasion less effective; more specifically, in some Member States, 
the penalty systems for not complying with reporting obligations may not have a dissuasive 
effect due to the manifestly low level of the related penalties; 

Although the Commission’s powers in the audited field is limited, the ECA recommend 
that the Commission clarify the EU legislative framework; improve the quality of DAC 6 
reports; ensure that the impact of penalties is adequate, enhance its support to the Code of 
Conduct Group (the EU’s specialised body for business taxation); monitor the results and 
impact of the fight against harmful tax regimes and corporate tax avoidance. 

In  response  to  the  ECA’s  special  report,  the  Commission  accepted  most  of  the 
recommendations,  that  takes  into  account  the  need  to  clarify  the  hallmarks,  and  the 
definitions required for their operation, including the possibility of examining a revision 
of the legal framework. 

102 

 
 
 
ANNEX IX. REPLIES FROM MEMBER STATES ON DAC6 HALLMARKS 

In  the  framework  of  the  evaluation  of  the  relevance  of Annex  IV  of  the  Directive,  the 
Commission services sent a questionnaire to the Member States in May 2024 to assess the 
concept  of  main  benefit  test  and  to  the  DAC6  hallmarks,  in  terms  of  clarity,  actual 
application,  and  efficiency. The  questionnaire  is  an  updated  version  of  a  previous  one, 
which was sent to the Member States in 2022.  

The questionnaire is structured in 6 sections as follows: 

–  Section 1: Introduction 

Section 2: Identification of the Member State 

–  Section 3: Evaluation of the concept of the Main Benefit Test 

–  Section 4: Assessment of existing hallmarks 

–  Section 5: Proposals for new hallmarks 

–  Section 6: Annex I – List of hallmarks provided for in Annex IV of DAC6 

A  summary  of  the  relevant  replies  related  to  Section  2,  3,  4  and  5  is  presented  in  the 
following subsections. 

Member States replying to the questionnaire 

26 Member States submitted their replies to the questionnaire under analysis. 

One Member State specified that they have not replied because they did have nothing new 
to add to the answers sent in 2022. 

Evaluation of the concept of the Main Benefit Test 

1.  Definition 

Generic hallmarks under category A and specific hallmarks under category B and under 
points (b)(i), (c) and (d) of  paragraph  1 of  category C may only be taken into account 
where they fulfil the “main benefit test”. That test will be satisfied if it can be established 
that the main benefit or one of the main benefits which, having regard to all relevant facts 
and circumstances, a person may reasonably expect to derive from an arrangement is the 
obtaining of a tax advantage. 

In the context of hallmark under paragraph 1 of category C, the presence of conditions set 
out in points (b) (i), (c) or (d) of paragraph 1 of category C cannot alone be a reason for 
concluding that an arrangement satisfies the main benefit test. 

a)  Questions on the MBT concept 

Is the concept of MBT clear enough? 

Agree 
Partially agree 
Disagree 

Answers 
11 
13 
2 

103 

 
 
 
If partially agree / disagree, please choose which of the following concepts should be 
clarified:  

“main benefit” 
“main benefit test” 
Condition  “may 
fulfilled 
Other / none of these 
No answer 

reasonably 

expect” 

Answers 
8 
8 
6 

2 
11 

The majority of the replying Member States partially agreed that the concept of MBT is 
clear enough. Clarifications were deemed necessary for the concepts indicated in the above 
table. 

b)  Summary  of  the  replies  from  Member  States  on  how  the  concept  of  “main 
benefit”, “main benefit test” and the concept of the fulfilled condition could 
be improved  

According to several Member States, the concept of “main benefit”, including that of “tax 
advantage”, is not clear enough and should be better defined at the EU level also to avoid 
misinterpretations. There is a common view to support additional guidance and practical 
examples provided by the Commission to tax administrations and taxpayers in order to 
understand if the “main benefit test” is satisfied.  

Member States shared examples of guidance to the stakeholders in conducting this test, for 
example through the formulation of the following questions: 

–  Is there a tax benefit expected from the arrangement? Yes/No. 

–  Is the tax benefit substantial compared to the other impacts of the arrangement? 

Yes/No. 

–  Does the tax benefit fall specifically within the scope of a provision of the national 

law or jurisprudence of the taxpayers country of residence? Yes/No. 

–  Does  the  arrangement  breach  the  purpose  of  the  provisions  applied  or  is  the 

situation ambiguous or unclear? Yes/No. 

Another Member State indicates that in order to clarify the concept of “main benefit” and 
the “main benefit test”, it would be useful to answer the following questions: 

–  Whether and to what extent are non-EU tax advantages relevant, as the scope of 

the DAC is limited to EU taxes (article 2 DAC)? 

–  How should “one of the main benefits” be interpreted? 

–  Whether and to what extent is deferral of taxation a tax advantage? 

–  Whether and to what extent is avoiding a fiscal disadvantage (e.g. avoiding legal 
or economic double taxation) a tax advantage for the application of the MBT? 

–  What is a tax advantage?  

–  How can an intermediary or relevant taxpayer substantiate that the main benefit or 

one of the main benefits is not a tax advantage? 

104 

 
 
–  How should the following phrase be interpreted? “In the context of hallmark under 
paragraph 1 of category C, the presence of conditions set out in points (b)(i), (c) or 
(d) of paragraph 1 of category C cannot alone be a reason for concluding that an 
arrangement satisfies the main benefit test”. 

–  To what extent is “policy intent” relevant for the application of the MBT? And if 
“policy intent” is relevant, how should this be assessed when applying the MBT?  

One Member State suggests improving the “main benefit test” including the term “effect” 
and reformulate it in the following way:  

–  Part I.Main benefit test Generic hallmarks under category A and specific hallmarks 
under category B and under points (b)(i), (c) and (d) of paragraph 1 of category C 
may only be taken into account where they fulfil the “main benefit test”.  

–  That test will be satisfied if :  

–  1. It can be established that the main effect or one of the main effects which, having 
regard to all relevant facts and circumstances, a person may reasonably expect to 
achieve from an arrangement is the obtaining of a tax advantage or,  

–  2. Regardless of paragraph 1, having regard to all relevant facts and circumstances, 
a  person  acting  reasonably  with  the  objective  different  than  obtaining  of  a  tax 
advantage could  to  choose other way of acting not  related to  obtaining  of a tax 
advantage and the tax advantage is the main reason or one of the main reasons to 
choose way of acting determined by an arrangement. 

–  In  the  context  of  hallmark  under  paragraph  1  of  category  C,  the  presence  of 
conditions set out in points (b)(i), (c) or (d) of paragraph 1 of category C can not 
alone be a reason for concluding that an arrangement satisfies the main benefit test. 

Another Member State considers that a counterfactual test could be provided to satisfy the 
“main  benefit  test”:  this  would  involve  comparing  the  taxes  resulting  from  the 
implementation of the cross-border arrangement with those that would have been due in 
its absence.  

One Member State suggests supplementing the MBT with a threshold. 

Furthermore,  comments  call  for  clarifying  whether  the  assessment  regarding  the  “main 
benefit” should be objective or subjective, in order to avoid the risk of having different 
interpretations by Member States. 

The nuances between these examples and proposals tend to show that there is a difference 
in  approach  between  Member  States  and  confirms  that  there  is  no  fully  harmonised 
application of the concept at the moment. 

2.  Application 

a)  Questions on the application of the MBT 

Does the MBT concept generate specific difficulties in its application? 

Yes 
No 

Answers 
16 
10 

The majority of Member States agreed that the MBT may generate specific difficulties in 
practice because of the demonstration of the tax advantage: 

105 

 
 
One  of  the  behaviours  adopted  by  stakeholders  and  therefore  risky  for  the  purposes  of 
DAC6 would be to adopt one of the schemes covered by DAC6 but to find many other 
reasons beyond the fiscal ones for the scheme, thus not satisfying the “main benefit test”. 
Instead, in  some other cases, the arrangements are reported by taxpayers/intermediaries 
even though in their view the “main benefit test” is not met, because they prefer reporting 
than taking a risk on being subject to penalties.  

The risk raised here is that these situations could lead to over-reporting, collection of 
information  that  is  not  necessarily  relevant,  and  therefore  of  little  use  to  Member 
States. 

Several Member States reported receiving a significant number of requests for guidance 
on the assessment of the MBT, without quantifying them. 

Do you have indications that would raise issues concerning the correct application of 
MBT in DAC6 (i.e. articles, conferences, informal exchanges between the 
stakeholders – e.g. banks, lawyers, assets managers… - and the administration)? 

Yes 

No 

Answers 

10 

16 

Some Member States specified that the main issue concerning the correct application of 
MBT  is  the  lack  of  clarifications  and  misinterpretations,  sometimes  intentional  from 
intermediaries. According to one Member State, “some advisors build ways around [the 
concept of main benefit] so that to avoid being in scope. Therefore, for example, for those 
Member States who have chosen to use a ratio90 to determine the main characteristic, it 
may be possible that tax advisors "play" with this ratio so that a particular arrangement 
be out of scope”. 

Do you have indications that the MBT is a source of excessive administrative burden 
for intermediaries or taxpayers subject to the reporting obligations? (i.e. requests 
for guidance or for rulings, closed or ongoing administrative procedures, including 
legal challenges) 

Yes 

No 

Answers 

8 

18 

In some cases (8 Member States), administrations have observed that the MBT concept 
may be a source of excessive administrative burden. According to these, excessive burden 
may  arise  from  the  time  required  to  analyse  all  the  benefits  obtained  from  each 
arrangement91. 

90  Commission view: it should be noted that the Directive does not provide for the application of a ratio. 
91  Commission view: This point may be relevant. However, the analysis of a risky transaction where 

there is a potentially tax harmful cross-border arrangement results from the intention of the Council, 
which with DAC6 established the framework to protect Member States against such actions. 

106 

 
 
 
 
 
 
Has your Member State issued administrative guidance on the MBT? 

Yes 

No 

Answers 

19 

7 

If no, please choose an answer 

DAC6 is clear enough 

We  provided  additional  explanations  in  the  legal 
implementation 

Other 

Answers 

3 

1 

3 

It  is  notable  that  most  Member  States  (20)  have  established  ad  hoc  administrative 
guidelines or other legal framework in the context of the main benefit test. Only a very few 
(3) have not done so, considering that the DAC6 was sufficiently clear. However, many 
Member States stated that the Commission should issue common guidance to mitigate the 
risk of introducing inconsistent practices. 

Assessment of existing hallmarks 

Category A – Generic Hallmarks 

a)  Definition 

The definition of Hallmark A in DAC6 Annex IV is clear 

Hallmark A1 
Hallmark A2a 
Hallmark A2b 
Hallmark A3 

Agree 

18 
21 
19 
11 

Partially 
agree 
4 
1 
2 
10 

Disagree 

N/A 

0 
0 
0 
3 

4 
4 
5 
2 

In principle, hallmarks A are considered to be fairly clear, except for hallmark A3, which 
appears to be more problematic, and to a more limited extent, hallmark A1. 

107 

 
 
 
 
 
 
Those  Member  States  who  replied  “N/A”  specified  that  this  is  due  to  the  fact  that  the 
relevant hallmark A is not used by the intermediaries / taxpayers in the arrangements (2) 
either (i) reported by their Member State to the Central Directory (1), or (ii) related to their 
Member  State  reported  by  other  Member  States  to  the  Central  Directory.  The  same 
explanation applies below. 

b)  Application 

Does Hallmark A generate specific difficulties in its application?  

Hallmark A1 
Hallmark A2a 
Hallmark A2b 
Hallmark A3 

Yes 
1 
1 
1 
5 

No 
16 
16 
13 
15 

N/A 
9 
9 
12 
6 

Do you have indicators that would raise issues concerning the correct application of 
Hallmark A? (i.e. articles, conferences, informal exchanges between the stakeholders 
– e.g. banks, lawyers, assets managers, etc.– and the administration) 

Hallmark A1 
Hallmark A2a 
Hallmark A2b 
Hallmark A3 

Yes 
3 
1 
1 
5 

No 
17 
17 
15 
18 

N/A 
6 
8 
10 
3 

Do you have indicators that would raise issues concerning Hallmark A being a 
source of excessive administrative burden for intermediaries or taxpayers subject to 
the reporting obligations? (i.e. requests for guidance or for rulings, closed or 
ongoing administrative procedures, incl. legal challenges) 

Hallmark A1 
Hallmark A2a 
Hallmark A2b 
Hallmark A3 

Yes 
2 
2 
2 
5 

No 
19 
19 
17 
19 

N/A 
5 
5 
7 
1 

It should be emphasised that among the Member States responding to the questions above, 
the hallmarks A are not reported as having given rise to any specific difficulties, with the 
exception of hallmark A3. A few Member States mention elements that could possibly raise 
a problem in their correct application, particularly as regards hallmarks A1 (3) and A3 (5). 
Regarding excessive administrative burden, hallmark A3 concentrates most criticisms. 

c)  Efficiency 

Hallmark A is sufficiently relevant for risk assessment 

Hallmark A1 
Hallmark A2a 
Hallmark A2b 
Hallmark A3 

Agree 

14 
17 
15 
14 

Partially 
agree 
5 
2 
2 
9 

Disagree 

N/A 

1 
1 
1 
0 

6 
6 
8 
3 

108 

 
 
 
 
 
 
 
Hallmark A  is  sufficiently  relevant  for  identification  of  loopholes  in  the  domestic 
legislation or in the double taxation conventions 

Hallmark A1 
Hallmark A2a 
Hallmark A2b 
Hallmark A3 

Agree 

14 
14 
13 
14 

Partially 
agree 
5 
4 
4 
9 

Disagree 

N/A 

1 
1 
1 
0 

6 
6 
8 
3 

Of  the  Member  States  responding,  most  consider  that  hallmarks  A  are  relevant  for 
identifying  tax  issues,  either  in  terms  of  risk  analysis  or  in  terms  of  possible  legal 
loopholes. Hallmark A3 raises more specific issues described in the following paragraphs. 

d)  Summary of the replies from Member States on the definition of Category A 

Generic hallmarks 

Some Member States have encountered practical issues and highlight ambiguities in the 
application  of  hallmarks A. A  few  Member  States  highlight  the  administrative  burden 
imposed on taxpayers and intermediaries by DAC6 reporting. 

Some  Member  States  express  the  need  for  more  detailed  guidance  on  hallmark  A1, 
especially  concerning  confidentiality  obligations.  They  point  out  that  hallmark  A1  is 
frequently  cited  as  a  precaution  with  standard  confidentiality  clauses  not  specifically 
related to tax arrangements. This practice has led to significant administrative workload 
without necessarily increasing the value of the reports in certain Member States.  

Although the wording of the directive makes it possible to differentiate between situations 
in a way that is generally clear for A1 (as the majority of Member States emphasise), one 
Member State consider that there is a possible overlap between hallmarks A1 and A3, 
suggesting further analysis to address the risk of redundancy. 

2 Member States raised the possible issue of the application of the MBT to hallmark A2a, 
asking for more guidance in this respect. 

According to 5 Member States, hallmark A3 has been more problematic due to its broad 
and ambiguous language. They emphasize the need for a clearer definition of the terms 
“standardized  documentation”  and  “substantial  customization”  and  note  a  possible 
confusion  over  what  constitutes  a  significant  change  or  major  modification  within  the 
meaning of standardized. In 2 Member States, the broad application of this hallmark has 
led to excessive reporting, reducing the efficiency and quality of the reports. 

109 

 
 
 
 
 
Category B – Specific Hallmarks 

a)  Definition 

The definition of Hallmark B in DAC6 Annex IV is clear 

Hallmark B1 
Hallmark B2 
Hallmark B3 

Agree 

20 
14 
16 

Partially 
agree 
2 
9 
8 

Disagree 

N/A 

0 
2 
1 

4 
1 
1 

In principle, hallmarks B are considered by the Member States to be rather clear. However, 
hallmarks B2 and B3 concentrate criticisms from one third of the Member States, mainly 
on certain aspects of their definition. 

Those  Member  States  who  replied  “N/A”  specified  that  this  is  due  to  the  fact  that  the 
relevant Hallmark B is not used by the intermediaries / taxpayers in the arrangements either 
(i) reported by their Member State to the Central Directory, or (ii) related to their Member 
State  reported  by  other  Member  States  to  the  Central  Directory. The  same  explanation 
applies below. 

b)  Application 

Does Hallmark B generate specific difficulties in its application?  

Hallmark B1 
Hallmark B2 
Hallmark B3 

Yes 
0 
6 
7 

No 
19 
18 
17 

N/A 
7 
2 
2 

Do you have indicators that would raise issues concerning the correct application of 
Hallmark B? (i.e. articles, conferences, informal exchanges between the stakeholders 
– e.g. banks, lawyers, assets managers, etc.– and the administration) 
N/A 
8 
2 
2 

Hallmark B1 
Hallmark B2 
Hallmark B3 

Yes 
1 
4 
5 

No 
17 
20 
19 

Do you have indicators that would raise issues concerning Hallmark B being a source 
of  excessive  administrative  burden  for  intermediaries  or  taxpayers  subject  to  the 

110 

 
 
 
 
 
 
 
reporting  obligations?  (i.e.  requests  for  guidance  or  for  rulings,  closed  or  ongoing 
administrative procedures, incl. legal challenges) 

Hallmark B1 
Hallmark B2 
Hallmark B3  

Yes 
1 
4 
5 

No 
20 
21 
20 

N/A 
5 
1 
1 

Among the Member States responding to the questions above, the hallmark B1 did not give 
rise to any specific difficulties. A handful of Member States reported possible issues with 
correct application and situations of excessive administrative burden with hallmarks of B2 
(4 Member States) and B3 (5 Member States).  

c)  Efficiency 

Hallmark B is sufficiently relevant for risk assessment 

Hallmark B1 
Hallmark B2 
Hallmark B3 

Agree 

16 
16 
16 

Partially 
agree 
3 
6 
6 

Disagree 

N/A 

2 
2 
2 

5 
2 
2 

Hallmark  B  is  sufficiently  relevant  for  identification  of  loopholes  in  the  domestic 
legislation or in the double taxation conventions 

Hallmark B1 
Hallmark B2 
Hallmark B3 

Agree 

16 
18 
19 

Partially 
agree 
3 
4 
3 

Disagree 

N/A 

1 
2 
2 

6 
2 
2 

Despite hallmarks B2 and B3 are considered by 6 Member States as less relevant for risk 
assessment in comparison with hallmark B1, 2/3 of the responding Member States report 
that the hallmarks B are relevant for identifying tax issues, either in terms of risk analysis 
or in terms of detection possible legal loopholes. 

d)  Summary  of  the  replies  from  Member  States  on  Category  B  Specific 
hallmarks, namely on (i) which concept should be specified and (ii) concrete 
examples of issues concerning the correct application of such Hallmarks 

In  regard  to  hallmark  B1,  some  Member  States  indicate  that  the  concepts  of 
“arrangement”, “participant”, “artificial steps” and “discontinuing its main activity” should 
be clarified. 

In regard to hallmark B2, some Member States raise examples of transactions that could 
be possibly in scope, like debt-equity-swaps or waiver of claims. The terms “converting 
income” and “other categories of revenue” raise also specific questions in some Member 
States: scope of the concepts in case of the conversion of income into another category of 
income, or the conversion of a genuine loan into a hybrid loan, or the “disappearance” of 
income  (e.g.  before  the  arrangement  there  was  a  certain  type  of  income,  after  the 
arrangement there is no (taxable) income (anymore)). 

111 

 
 
 
 
 
In case of newly set up arrangements, applicability of hallmark B2 to situations in which 
income does not yet exist or in which future income is uncertain for one Member State. 

Another Member State expresses the need for clarifications on which  level it should be 
determined whether there is a conversion of income, and on whether the requirement of 
the taxation at a lower level or the exemption from tax only refers to “other categories of 
revenue” or also to “capital” and “gifts”. 

In  regard  to  hallmark  B3,  according  to  some  Member  States,  the  following  terms  and 
concepts should be specified: 

–  “circularity” of a transaction (i.e. back to back loan). 

–  “roundtripping” (e.g. funds return to the same taxpayer or the same jurisdiction), 

“primary commercial purpose”(of interposed entities). 

A Member State wonders whether the requirement “without primary commercial function” 
should  be  interpreted  as  the  same  of  another  requirement  in  hallmark  D2a  concerning 
entities “that do not carry on a substantive economic activity”. 

The scope of hallmark B3 also raises a comment on whether hallmark B3 only applies in 
case of the interposing of entities and/or the offsetting of transactions (i.e. the last sentence 
of hallmark B3), or whether these situations are only examples of the application of this 
Hallmark, and if conditions. 

In terms of the use of information made available, regarding Hallmark B3 arrangements 
the incompleteness of information on the whole arrangement may constitute a challenge, 
mainly because it may involve jurisdiction outside the EU, and EU intermediaries may not 
know the whole plan of transactions. 

According to some Member States, common guidance with examples might be useful to 
understand how Hallmarks under Category B should work. 

Category C – Specific Hallmarks related to deductible cross-border transactions 

112 

 
 
 
 
a)  Definition 

The definition of Hallmark C in DAC6 Annex IV is clear 

Hallmark C1a 
Hallmark C1b(i) 
Hallmark C1b(ii) 
Hallmark C1c 
Hallmark C1d 
Hallmark C2 
Hallmark C3 
Hallmark C4 

Agree 

19 
18 
20 
18 
18 
22 
22 
16 

Partially 
agree 
4 
5 
3 
6 
6 
1 
2 
7 

Disagree 

N/A 

1 
1 
1 
1 
1 
1 
1 
2 

2 
2 
2 
1 
1 
2 
1 
1 

In principle, hallmarks C are considered by the Member States to be rather clear. However, 
hallmarks C1c, C1d, and C4 raise some mitigated comments from certain Member States.   

Those  Member  States  who  replied  “N/A”  specified  that  this  is  due  to  the  fact  that  the 
relevant hallmark C is not used by the intermediaries / taxpayers in the arrangements either 
(i) reported by their Member State to the Central Directory, or (ii) related to their Member 
State  reported  by  other  Member  States  to  the  Central  Directory. The  same  explanation 
applies below. 

b)  Application 

Does Hallmark C generate specific difficulties in its application?  

Hallmark C1a 
Hallmark C1b(i) 
Hallmark C1b(ii) 
Hallmark C1c 
Hallmark C1d 
Hallmark C2 
Hallmark C3 
Hallmark C4 

Yes 
2 
2 
2 
2 
5 
2 
1 
5 

No 
22 
22 
22 
22 
20 
21 
23 
19 

N/A 
2 
2 
2 
2 
1 
3 
2 
2 

Do you have indicators that would raise issues concerning the correct application of 
Hallmark C? (i.e. articles, conferences, informal exchanges between the stakeholders 
– e.g. banks, lawyers, assets managers, etc.– and the administration) 
N/A 
2 
2 
2 
1 
2 
1 
1 
2 

Hallmark C1a 
Hallmark C1b(i) 
Hallmark C1b(ii) 
Hallmark C1c 
Hallmark C1d 
Hallmark C2 
Hallmark C3 
Hallmark C4 

Yes 
2 
0 
0 
2 
1 
1 
0 
4 

No 
22 
24 
24 
23 
23 
22 
25 
20 

113 

 
 
 
 
 
Do you have indicators that would raise issues concerning Hallmark C being a source 
of  excessive  administrative  burden  for  intermediaries  or  taxpayers  subject  to  the 
reporting  obligations?  (i.e.  requests  for  guidance  or  for  rulings,  closed  or  ongoing 
administrative procedures, incl. legal challenges) 

Hallmark C1a 
Hallmark C1b(i) 
Hallmark C1b(ii) 
Hallmark C1c 
Hallmark C1d 
Hallmark C2 
Hallmark C3 
Hallmark C4 

Yes 
1 
2 
3 
4 
4 
3 
2 
5 

No 
22 
22 
21 
21 
21 
20 
22 
19 

N/A 
3 
2 
2 
1 
1 
3 
2 
2 

The hallmarks C generally do not raise major difficulties in their application. A handful of 
Member States reported specific issues with C1d and C4 (5 Member States), issues in terms 
of  correct  application  with  C4  (4  Member  States),  and  situations  of  excessive 
administrative  burden  with  C1c  (4  Member  States),  C1d  (4  Member  States)  and  C4  (5 
Member States). 

c)  Efficiency 

Hallmark C is sufficiently relevant for risk assessment 

Hallmark C1a 
Hallmark C1b(i) 
Hallmark C1b(ii) 
Hallmark C1c 
Hallmark C1d 
Hallmark C2 
Hallmark C3 
Hallmark C4 

Agree 

22 
22 
23 
22 
20 
20 
22 
22 

Partially 
agree 
1 
3 
2 
2 
4 
2 
2 
3 

Disagree 

N/A 

1 
0 
0 
1 
1 
1 
0 
0 

2 
1 
1 
1 
1 
3 
2 
1 

Hallmark  C  is  sufficiently  relevant  for  identification  of  loopholes  in  the  domestic 
legislation or in the double taxation conventions 

Hallmark C1a 
Hallmark C1b(i) 
Hallmark C1b(ii) 
Hallmark C1c 
Hallmark C1d 
Hallmark C2 
Hallmark C3 
Hallmark C4 

Agree 

21 
22 
21 
21 
19 
20 
21 
20 

Partially 
agree 
1 
2 
3 
2 
4 
2 
2 
4 

Disagree 

N/A 

1 
0 
0 
1 
1 
0 
0 
0 

3 
2 
2 
2 
2 
4 
3 
2 

114 

 
 
 
 
 
 
The responses from Member States show that there is a consensus on the usefulness and 
efficiency of C hallmarks. Member States agree – to a large extent – on their relevance to 
tax risk analysis or the detection of loopholes, with minor reservations on hallmarks C1d 
(4 Member States) or C4 (4 Member States). 

d)  Summary  of  the  replies  from  Member  States  on  Category  C  Specific 
hallmarks related to deductible cross-border transactions, namely on (i) which 
concept should be specified and (ii) concrete examples of issues concerning the 
correct application of such Hallmarks 

Some Member States ask for further clarification on the concepts used in hallmarks C as 
follows: 

–  One Member State mentions that regarding hallmark C1a, the means to prove tax 
residency, for example, through a tax residency certificate or further investigation, 
should be detailed. 

–  A Member State do not consider the concept of “deductible payment” clear enough 
and  wonders  whether  it  includes  deemed  payments  and  accruals,  and  whether 
payments for asset acquisition are deductible. 

–  Regarding hallmark C1b(i), the terms “almost zero” tax rate raise some questions 

among some Member States. 

–  Regarding hallmarks C1b(ii) and C1c, one Member State suggests clarification on 

how to apply these hallmarks to permanent establishments. 

–  With  reference  to  hallmark  C1c,  a  Member  State  mentions  that  it  is  not  clear 

whether arrangements involving exempt entities should be reported. 

–  Concerning hallmark C1d, a Member State suggests a clarification of the concept 
of “preferential tax regime”, and the causality between payments and preferential 
tax regimes.  

–  Concerning hallmark C2, one Member State report concerns about cross-border 
leasing and the possibility of multiple depreciations and investment allowances in 
different  Member  States. According  to  this  Member  State,  leasing  contracts  are 
often reported, and they suggest common guidance or an “angel list” (i.e. white 
list) to prevent irrelevant reporting. On the other hand, another Member State seeks 
clarification on hybrid mismatch arrangements and double deductions. 

–  Regarding hallmark C3, the claim for “relief from double taxation” did not seem 

clear to one Member State. 

–  As regard hallmark C4, some Member State express the need for clarification on 
exit  taxation,  the  relevance  of  introducing  a  differentiation  between  beneficial 
ownership  versus  civil  law  ownership,  as  well  as  a  definition  of  “material 
difference” in payable amounts to ensure harmonized application. 

115 

 
 
 
Category D – Specific Hallmarks concerning AEOI and beneficial ownership. 

a)  Definition 

The definition of Hallmark D in DAC6 Annex IV is clear 

Hallmark D1a 
Hallmark D1b 
Hallmark D1c 
Hallmark D1d 
Hallmark D1e 
Hallmark D1f 
Hallmark D2 

Agree 

18 
20 
18 
20 
17 
18 
20 

Partially 
agree 
4 
2 
4 
3 
4 
3 
3 

Disagree 

N/A 

0 
0 
0 
0 
0 
0 
0 

4 
4 
4 
3 
5 
5 
3 

In principle, hallmarks D are considered to be clear by 2/3 of the Member States. However, 
hallmarks  D1a,  D1c,  D1e  and  D1f  raise  some  mitigated  comments  from  a  minority  of 
Member States. 

b)  Application 

Does Hallmark D generate specific difficulties in its application?  

Hallmark D1a 
Hallmark D1b 
Hallmark D1c 
Hallmark D1d 
Hallmark D1e 
Hallmark D1f 
Hallmark D2 

No 
20 
21 
19 
21 
19 
18 
19 

N/A 
5 
5 
6 
5 
6 
6 
4 

Yes 
1 
0 
1 
0 
1 
2 
3 

116 

 
 
 
 
Do you have indicators that would raise issues concerning the correct application of 
Hallmark D? (i.e. articles, conferences, informal exchanges between the stakeholders 
– e.g. banks, lawyers, assets managers, etc.– and the administration) 
N/A 
3 
3 
4 
3 
5 
5 
3 

Hallmark D1a 
Hallmark D1b 
Hallmark D1c 
Hallmark D1d 
Hallmark D1e 
Hallmark D1f 
Hallmark D2 

Yes 
2 
1 
2 
2 
2 
1 
1 

No 
21 
22 
20 
21 
19 
20 
22 

Do you have indicators that would raise issues concerning Hallmark D being a source 
of  excessive  administrative  burden  for  intermediaries  or  taxpayers  subject  to  the 
reporting  obligations?  (i.e.  requests  for  guidance  or  for  rulings,  closed  or  ongoing 
administrative procedures, incl. legal challenges) 

Hallmark D1a 
Hallmark D1b 
Hallmark D1c 
Hallmark D1d 
Hallmark D1e 
Hallmark D1f 
Hallmark D2 

Yes 
2 
2 
2 
2 
2 
2 
3 

No 
21 
20 
20 
21 
19 
19 
21 

N/A 
3 
4 
4 
3 
5 
5 
2 

90% of the Member States responding consider that the hallmarks D generally do not raise 
major  difficulties  in  their  application,  and  do  not  create  excessive  burden  for 
intermediaries.  

c)  Efficiency 

Hallmark D is sufficiently relevant for risk assessment 

Hallmark D1a 
Hallmark D1b 
Hallmark D1c 
Hallmark D1d 
Hallmark D1e 
Hallmark D1f 
Hallmark D2 

Agree 

20 
20 
20 
20 
19 
19 
18 

Partially 
agree 
2 
2 
2 
2 
2 
2 
4 

Disagree 

N/A 

0 
0 
0 
0 
0 
0 
0 

4 
4 
4 
4 
5 
5 
4 

117 

 
 
 
 
 
 
 
 
Hallmark  D  is  sufficiently  relevant  for  identification  of  loopholes  in  the  domestic 
legislation or in the double taxation conventions 

Hallmark D1a 
Hallmark D1b 
Hallmark D1c 
Hallmark D1d 
Hallmark D1e 
Hallmark D1f 
Hallmark D2 

Agree 

20 
20 
19 
20 
18 
17 
17 

Partially 
agree 
2 
2 
3 
2 
3 
5 
5 

Disagree 

N/A 

0 
0 
0 
0 
0 
0 
0 

4 
4 
4 
4 
5 
4 
4 

The responses from Member States show that there is a consensus on the usefulness of 
hallmarks D in terms of efficiency. All Member States agree – to a large extent – on their 
relevance to tax risk analysis or the detection of loopholes, with minor reservations on 
hallmarks D1f (5 Member States) or D2 (5 Member States). Unlike the other hallmarks, 
where there are always  1  or 2 Member States  questioning  the relevance of certain  sub-
categories, the D hallmarks are unanimously supported by the Member States. 

d)  Summary  of  the  replies  from  Member  States  on  Category  D  Specific 

hallmarks, namely on AEOI and beneficial ownership 

According to a couple of Member States, there was no reporting of many cases under these 
hallmarks.  One  reason  put  forward  by  these  Member  States  could  be  the  difficulty  in 
interpretation. 

Regarding  hallmark  D1,  some  Member  States  raise  the  need  for  clarification  on  the 
question  of  whether  the  requirement  is  satisfied  merely  when  the  rules  of  AEOI  are 
undermined,  or  when  the  participants  have  intended  that  outcome.  One  Member  State 
points  out  that  in  the  2018  OECD  report  “Model  Mandatory  Disclosure  Rules  for  CRS 
Avoidance Arrangements and Opaque Offshore Structures” mandatory disclosure rules in 
relation to CRS avoidance are described. Part of the text of Hallmark D1 is aligned with 
the  OECD  mandatory  disclosure  rules  on  CRS  avoidance  but  partly  deviates  from  it, 
causing  a  risk  of  unclarity  to  what  extent  the  work  of  the  OECD  can  be  used  for  the 
interpretation of Hallmark D1. 

According  to  certain  Member  States,  the  following  concepts  should  be  specified  with 
examples in regard to: 

–  Hallmark  D1a:  “any  equivalent  agreements  on  the  automatic  exchange  of 

Financial Account Information” 

–  Hallmark D1c: “reclassification of income and capital into products or payments 
that are not subject to the automatic exchange of financial account information”. 

–  Hallmark  D2:  “substantive  economic  activity  supported  by  adequate  staff, 
equipment,  assets  and  premises”;  “where  the  beneficial  owners  (…)  are  made 
unidentifiable”. 

118 

 
 
 
 
Category E – Specific Hallmarks concerning transfer pricing 

a)  Definition 

The definition of Hallmark E in DAC6 Annex IV is clear 

Hallmark E1 
Hallmark E2 
Hallmark E3 

Agree 

21 
15 
12 

Partially 
agree 
2 
9 
12 

Disagree 

N/A 

2 
2 
2 

1 
0 
0 

While Member States consider that the E1 hallmark is generally sufficiently clear, several 
Member States have identified areas for improvement regarding the significance of the E2 
and E3 hallmarks. 

b)  Application 

Does Hallmark E generate specific difficulties in its application?  

Hallmark E1 
Hallmark E2 
Hallmark E3 

Yes 
1 
7 
11 

No 
23 
18 
15 

N/A 
2 
0 
0 

Do  you  have  information  that  would  raise  concerns  for  the  correct  application  of 
Hallmark E? (i.e. articles, conferences, informal exchanges between the stakeholders 
– e.g. banks, lawyers, assets managers, etc.– and the administration) 
N/A 
2 
0 
0 

Hallmark E1 
Hallmark E2 
Hallmark E3 

Yes 
1 
3 
5 

No 
23 
23 
21 

Is  Hallmark  E  a  source  of  excessive  administrative  burden  for  intermediaries  or 
taxpayers  subject  to  the  reporting  obligations?  (i.e.  requests  for  guidance  or  for 
rulings, closed or ongoing administrative procedures, incl. legal challenges) 

Hallmark E1 
Hallmark E2 
Hallmark E3 

No 
21 
20 
18 

N/A 
2 
0 
0 

Yes 
3 
6 
8 

119 

 
 
 
 
 
 
 
 
With regard to the application of hallmarks E, the opinion of the Member States is divided: 
while hallmark E1 does not seem to pose a significant problem, hallmarks E2 and, even 
more, E3 raise concerns about their correct application and are likely to cause an excessive 
administrative burden to some of the Member States. 

c)  Efficiency 

Hallmark E is sufficiently relevant for risk assessment 

Hallmark E1 
Hallmark E2 
Hallmark E3 

Agree 

22 
23 
20 

Partially 
agree 
1 
2 
5 

Disagree 

N/A 

1 
1 
1 

2 
1 
0 

Hallmark  E  is  sufficiently  relevant  for  identification  of  loopholes  in  the  domestic 
legislation or in the double taxation conventions 

Hallmark E1 
Hallmark E2 
Hallmark E3 

Agree 

22 
20 
19 

Partially 
agree 
2 
4 
5 

Disagree 

N/A 

0 
0 
0 

2 
2 
2 

Despite certain reservations expressed by some Member States about the application of 
hallmarks  E2 and E3, it must be emphasised that  their relevance is  not questioned in 
terms  of  effectiveness.  Member  States  (with  the  exception  of  one)  all  agree  that  the 
hallmarks are relevant enough, both for risk analysis and for identifying loopholes. 

d)  Summary of the replies from Member States on Category E Specific hallmarks 

concerning transfer pricing 

The comments  on hallmark E mainly  concern the terms  used, which  for some Member 
States  seem  to  give  rise  to  some  confusion  as  to  their  exact  definition.  The  risk  of 
inconsistent reporting is raised to explain their concern. 

For example, the terms “unilateral safe harbour rules” is open to interpretation and could 
benefit from explicit references to OECD Transfer Pricing Guidelines.  

Several  Member  States  report  difficulties  with  Hallmark  E2  due  to  the  lack  of  a  more 
precise  definition  for  “hard-to-value  intangibles”.  They  stress  that  it  could  lead  to 
compliance  burden  imposed  on  companies,  requiring  extensive  valuation  efforts. These 
Member States suggest aligning the terms with the OECD Transfer Pricing Guidelines to 
mitigate  these  challenges.  They  also  note  that  licensing  arrangements  and  risk  transfer 
mechanisms  also  complicate  the  application  of  this  hallmark.  Only  one  Member  State 
highlights the need for more explicit criteria to determine reportability. 

Hallmark E3 is the most frequently discussed, with 10 Member States raising concerns. 
The definition for “EBIT” and the risk for inconsistent application of the three-year period 
following a transfer are mentioned as possibly creating issues. Some Member States call 
for  more  explicit  guidelines  on  calculating  EBIT,  including  whether  to  follow  IFRS, 
GAAP, or national  accounting standards. Some other question how to  handle situations 

120 

 
 
 
 
involving prolonged losses or fluctuating EBIT, suggesting that the current 50% threshold 
and  three-year  period  might  be  too  arbitrary  and  lenient.  2  Member  States  point  out 
ambiguities in what constitutes an “intragroup” transfer and how EBIT reductions should 
be measured, particularly for relocations or transfers involving permanent establishments, 
emphasizing the need for further clarification from the Commission. 

Proposals for new hallmarks 

To improve the functioning of DAC6 as an “alert system” monitoring the trends of possibly 
tax-harmful tax planification, some Member States called for revisiting certain Hallmarks 
and add new features to better capture relevant arrangements that may potentially harmful:  

–  In category B: a new hallmark targeting the dividend stripping schemes92; 

–  In category C: a new hallmark targeting conduit arrangement for treaty shopping 
or Directive shopping, exemplified by non-EU investors using shell companies in 
EU member states for tax benefits; 

–  In category C, new hallmarks covering hybrid mismatches, referencing OECD 
reports. They should focus on financial instruments, hybrid entities, and permanent 
establishments  leading  to  deduction  without  inclusion  and  double  deduction 
scenarios; 

–  In category E, new hallmarks for arrangements based on transfer of intellectual 
property,  transfer-pricing  mismatches93,  and  profit  allocation  to  permanent 
establishments. 

New Hallmarks targeting arrangements with the following features are also proposed:  

–  Property transfer of asset within a short time; 

–  Differences between actual and legal places of business; 

Limited substance in group companies, and shell entities; 

Payments to entities with low effective tax rates; 

Use of crypto assets in transactions;  

–  Use of hybrid entities not neutralized by ATAD;  

–  Real estate-based arrangements in relation with low effective tax rates. 

A few other Member States believe that for the time being, no additional hallmarks are 
needed,  as  they  still  need  time  to  become  familiar  with  the  existing  hallmarks  of 
DAC6.   

92  Dividend stripping is a series of transactions based on a complex mechanism of trading, selling and 
repurchasing shares over a certain period to avoid payment of dividend taxes, or to claim tax 
reimbursement (OECD (2023), Dividend Tax Fraud: Raising Awareness of Dividend Stripping 
Schemes, OECD Publishing, Paris, https://doi.org/10.1787/70ee934c-en. 

93  In transfer pricing policies, the arm’s length principle determines that the conditions agreed upon for 
inter-co transactions between entities that are part of a group must be similar to ones conducted 
between companies that are not under common ownership or control. If these conditions are not at 
arm’s length, a profit correction may be applied to take arm’s length conditions into account. The arm’s 
length principle is not necessarily applied in exactly the same way in different countries. In the case of 
internationally operating groups, this may lead to mismatches. 

121 

 
 
 
ANNEX X. SUMMARY OF THE VISDAC RECOMMENDATION REPORT 

INTRODUCTION 

In order to respond to the key recommendations in the Reports of the European Court of 
Auditors  and  the  Committee  on  Economic  and  Monetary  Affairs,  the  Commission  in 
collaboration with Member States launched a programme of visits to all Member States 
(the ‘VISDAC project’). The aim of the VISDAC project was to improve the quality and 
use  of  DAC1-4 AEOI  data  exchanged  between  Member  States. Accordingly,  Member 
States  received  recommendations  on  quality  and  use  issues. The VISDAC  project  took 
place between 2022-2024. This Annex summarises the VISDAC Recommendation Report 
(“Report”) that has been issued to Member States and is broken down by recommendations 
related to DAC data quality, data use and horizontal recommendations.  

DAC1-4 DATA QUALITY RECOMMENDATIONS 

There  were  a  number  of  quality  recommendations  that  were  common  among  Member 
States  and  will  require  ongoing  monitoring  by  the  Commission.  There  were  many 
differences between Member States in the extent of systematic controls in place to check 
data  collected  at  national  for  DAC1  purposes.  The  Commission  will  follow-up  with 
Member States through the Fiscalis program to promote best practices. 

The completeness  and correctness  of the non-resident TIN collected for  DAC purposes 
remains  an  ongoing  challenge  for  Member  States.  Member  States  were  issued  with 
recommendations to improve their processes, in particular with regard to TIN validation. 
The  Commission  will  continue  to  promote  tools  like  the  TIN-on-the  Web  module94. 
Further, the Commission will launch a study in 2025 which will include the validation of 
the TIN as a topic as well as examining possible options for implementing an EU-TIN for 
natural persons.   

With respect to CRS (Common Reporting Standard), which is closely aligned with DAC2, 
the OECD Peer Review has issued Member States a number of recommendations on the 
effectiveness of their exchanges with other jurisdictions95. During the visits, the VISDAC 
experts  monitored  how  these  recommendations  are  being  addressed  by  Member  States. 
Member States should continue their efforts to address these recommendations.  

Although  Member  States  have  established  systems  for  checking  that  MNEs  correctly 
report  data  according  to  format  of  the  DAC4  requirements  for  country-by-country 
reporting,  some  Member  States  have  not  included  checking  compliance  with  the 
underlying framework of country-by-country reporting in their national audits. This issue 
is of particular relevance for related information that will be collected under DAC9 which 
incorporates the OECD Pillar 2 exchange of information. Member States should ensure 
that checking DAC4 compliance is an integral part of their national audit processes for 
MNEs. 

DAC1-4 DAC DATA USE RECOMMENDATIONS 

94  https://taxation-customs.ec.europa.eu/online-services/online-services-and-databases-taxation/taxpayer-

identification-number-tin_en.   

95  OECD Peer Review of the Automatic Exchange of financial account information (2022). 

122 

 
 
To make effective use of DAC AEOI data, efficient processes are necessary for matching 
DAC  data  received  with  taxpayer  data  in  the  national  tax  databases  of  the  receiving 
Member State. The Report proposes a number of best practices to improve the matching 
processes. Essential elements of such matching processes are automation and the use of 
new technology plus a few other measures. Recommendations have been issued to Member 
States to implement actions to improve compliance of their taxpayers in declaring DAC1 
and DAC2 related income and assets. The Report proposes a wide range of compliance 
activities, some of which have already been implemented by several Member States. These 
include  Voluntary  Compliance  Programs  (‘VCPs’),  information  notifications  through 
taxpayer web-portals, the pre-filling of tax returns as well as nudge campaigns. Adequate 
digitalisation is a key requirement to use such tools.   

The systematic use of DAC data is performed through the use of risk assessment processes. 
The Report proposes a number of actions to improve Member State DAC risk assessment 
processes such as integrating various data streams related to the taxpayer obtained through 
the DAC. While all Member States have some form of targeted risk assessment processes, 
the scope of these risk assessment models differs significantly among the Member States, 
including the frequency and the extent to which all DAC1 and DAC 2 data is used in the 
risk assessment processes of Member States.  To be effective, risk assessment processes 
should  use  the  data  from  most  recent  exchanges,  be  applied  systematically,  and  be 
evaluated on a regular basis.  

Further,  Member  States  could  further  explore  the  use  of  DAC  data  in  their  wider  risk 
assessment models, for example, combining all received DAC data with national tax data, 
for assessing overall tax liability. DAC data should also be used for other purposes beyond 
direct  taxation  as  permitted  by  the  DAC,  like  tax  recovery  and  combatting  Money 
Laundering96.   

HORIZONTAL RECOMMENDATIONS 

The Report identified a number of recommendations that were common to DAC1-4 which 
are outlined below.  

Underlying all the VISDAC recommendations is the need for Member States to ensure that 
adequate human and IT resources are provided, and adapted to the continuous development 
of EU legislation, to ensure the high quality of DAC data collected at national level and 
sent to other Member States.  Further, adequate human and IT resources are necessary for 
the effective use of DAC data for the compliance activities of tax administrations.  

Member State experts stressed the importance of the bilateral feedback process between 
Member States which is reflected in the number of recommendations related to the annual 
feedback  process.  The  annual  feedback  process,  revised  in  January  2024,  involves 
providing other Member States with feedback on the quality of data they send, as well as 
quantitative data like the sending Member State’s matching rates. Unmatched data can also 
be notified to the sending Member States for follow-up. The Report includes a number of 

96  DAC data can be used for assessment, administration and enforcement for the following: direct taxes, 

tax recovery, VAT, other indirect taxes, compulsory social security contributions, customs and other 
duties. As from January 2026, DAC AEOI can also be used for countering Money 
Laundering/Terrorist Financing, and for any act covered by Article 215 of the EU Treaty, including 
sanctions. 

123 

 
 
proposed actions that Member States could implement to improve their current feedback 
processes.  Member  States  received  recommendations  in  relation  to  measuring  the 
effectiveness and efficiency of the DAC. Together with Member States, the Commission 
has  established  a  KPI  (Key  Performance  Indicator)  framework  which  can  be  used  to 
monitor the objectives of DAC1-4, including their benefits. Publication by Member States 
of these benefits increases transparency on how DAC data is used by tax administrations.  

The DAC requires that Member States have sanction regimes that ensure compliance of 
RFIs (Reporting Financial Institutions) with respect to their obligations under DAC2, and 
MNEs  (Multinational  Enterprises)  with  respect  to  their  obligations  under  DAC4. 
Recommendations  in  respect  of  sanctions  were  issued  to  Member  States  for  the  non-
application of sanctions, increase the sanction fine, and application of sanctions that go 
beyond deliberate breach or gross negligence. Member States should review their existing 
provisions and take measures to ensure that their DAC sanction regimes have effective, 
proportionate and dissuasive penalties for non-compliance. 

CONCLUSIONS 

The main conclusion of the Report is that Member States can generally still make progress 
to ensure a better quality of DAC1-4 data exchanged, to fulfil their obligations under the 
DAC, and to better use this data to meet the objectives of ensuring tax fairness and reducing 
the tax gap.   

The Fiscalis programme, through the use of expert groups or dedicated workshops, will 
continue to be used to address the issues identified in the Report as well as to promote best 
practices. Further, the Commission Services will use the YA AEOI Survey to monitor how 
the recommendations are being implemented by Member States.  

The Commission will consider how best to move forward with the VISDAC project, for 
example, by having a targeted approach on the issues that are regarded as priority.  

124 

 
 
 
ANNEX XI - TARGETED CONSULTATION WITH ECONOMISTS 

26 September 2024 European Commission – Brussels 

Minutes 

This  document  should  be  regarded  solely  as  a  summary  of  the  contributions  from  the 
experts interviewed for the targeted consultation in the framework of the Evaluation of the 
DAC. It cannot in any circumstances be regarded as the official position of the Commission 
or  its  services.  Responses  to  the  interviews  cannot  be  considered  as  a  representative 
sample of the views of the professionals or the EU population. 

Objectives 

•  A targeted panel of economists was invited to comment specific points on the DAC 
to  assess  its  effectiveness,  its  efficiency;  the  relevance  and  the  coherence  of  its 
provisions; and its EU added value. 

Summary of the discussions 

•  Efficiency: impact of the AEOI on tax evasion and profit shifting   

The  panel  of  experts  confirmed  the  deterrent  effect  of  the AEOI  as  regards  to 
DAC2. They confirmed that the impact measured led to the conclusions that DAC2 
/ CRS may be considered a major success, to a certain extent.  

Economists found that rapid progress can be made against tax evasion when global 
agreements are enforced: the creation of AEOI CRS/DAC2 in force since 2017 (> 
100  countries  participating  in  2023),  CbCR/DAC4,  and  eventually  Pillar  2 
(endorsed by > 140 countries in 2021) led to a global effect: offshore tax evasion 
has declined by a factor of about three over the last 10 years.  

Before 2013, households owned the equivalent of 10% of world GDP in financial 
wealth offshore, the bulk of which was undeclared to tax authorities; these assets 
were  held  mostly  by  HNWIs  (or  structures  shadowing  them).  The  situation 
regarding the assets has changed. The equivalent of 10% of world GDP is still held 
in financial wealth offshore, but only about 25% of it evades taxation: economic 
models and scenarios show a decrease in non-compliance. 

However,  new  trends  in  concealing  assets  from  tax  administration  have  been 
detected and the observations of economists confirmed that several leverages were 
used:  

i) shift to real estate investments: the trend is very clear even before the entry into 
force of DAC2/CRS. This was done in favour of a place like London in the years 
2015-2020.  After  Brexit,  there  is  a  trend  towards  Dubai,  where  real  estate 
investment has boomed (till effective nowadays).  

125 

 
ii) Use of ‘golden visas’ based on ‘residency by investment programs schemes’: 
evidence  from  outside  and  inside  the  EU  market  e.g.  Portugal.  This  has  also 
affected  the  property  market,  which  has  been  completely  disrupted  in  certain 
places.   

•  Relevance of DAC4: transparency in transfer pricing policies, change in the 

behaviour of multinational enterprises 

Economists found the effects of DAC4 / CRS questionable, considering that 7 years 
after  the  start  of  the  BEPS  process  (and  CbCR),  profit  shifting  appears  to  have 
changed  only  marginally. According  to  economists,  a  relatively  large  amount  of 
profits is still shifted to offshore jurisdictions (~$1 trillion in 2022), equivalent of 
35% of profits booked by MNEs outside the HQ’s jurisdiction. CIT losses are still 
significant, i.e. up to 10% of corporate tax revenues collected globally.  

However, it doesn’t mean that the policy initiatives had no effect: economists had 
evidence that without them, situation would be probably worst and BEPS higher. 

•  EU added value and impact on EU competitiveness 

Asked about the risk for EU businesses of being impacted by mandatory disclosure 
rules  on  potential  aggressive  tax  planning  or  DAC4,  economists  had  mitigated 
analysis, and seemed rather dubious about these hypotheses.  

They indicated that they have strong evidence that DAC2/CRS has an economic 
impact on financial institutions at a global level, and that in some cases, the weight 
seems to be poorly distributed between large companies and SMEs. On the other 
hand, they questioned such an effect in relation to DAC6 and DAC4, especially for 
the latter given that CbCR are global. 

When asked the relevance of relaxing obligations on MNEs to ensure a better level 
playing field for businesses, the economists recalled that the shift in profits from 
MNEs  to  offshore  jurisdictions  had  been  very  little  affected  by  the  previous 
measures, and that the promise of a minimum of 15 % overall taxation had not yet 
been achieved, despite the entry into force this year of Pillar 2.   

They also consider that it would be very premature to call into question the CbCR. 
They also referred to the public CbCR as an instrument of economic interest which 
makes  it  possible  to  have  up-to-date  data  and  to  compare  it  with  what 
administrations have received with the CbCR / DAC4 reports.   

They also considered that the reduction in obligations would send a contradictory 
signal, if not negative, in so far as it could be perceived as an incentive to continue 
introducing aggressive tax schemes, to the detriment of Member States’ budgets. 

•  Efficiency and coherence of the DAC and possible challenges 

In terms of individual tax evasion, recent reports tend to show that practices related 
to wealth management and capital concealment have evolved.  

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These  have  concentrated  in  new  types  of  assets  (e.g.  crypto  assets)  or  more 
traditional  ones  (real-estate  investments  through  shell  entities  or  opaque 
arrangements).  

In terms of information exchange, the EU has instruments targeting income from 
real  estate  properties  (DAC1  and,  to  some  extent,  some  beneficiaries  through 
DAC7) and more recently cryptos (DAC8).  The issue has been raised from several 
angles.   

The  most  important  is  the  identification  of  the  beneficial  owner.  The  EU AML 
context  was  recalled,  as  well  as  the  progress  foreseen  in  the  most  recent AML 
package.  This  point  has  made  it  possible  to  identify  the  relative  European 
harmonisation on the subject, whereas this is not necessarily the case in other non-
EU jurisdictions.   

An exchange also took place on the WP10 initiative at the OECD. It was indicated 
that the EU is ahead of the rest of the countries, as Member States already exchange 
real estate data and see the interest of it. This sequence of exchanges showed that, 
from this point of view, the European Union is a frontrunner.   

However,  access  to  beneficial  ownership  information  for  tax  purposes  seems 
crucial  for the future, particularly  in  the case of  a global tax on High net-worth 
individuals (HNWIs).  In that regard, asked whether an automatic exchange of tax 
information on immovable property and related beneficial owners should be carried 
out, to ensure the success of a comprehensive tax on HNWIs, the economists agreed 
that it would be particularly complex to introduce taxation without the information 
making it possible to establish taxable bases, for example by relying on the market 
value of the property owned, collected by the competent authorities.    

•  Simplification 

The  exchange  continued  on  the  possible  basis  of  the  real  estate  thresholds  to 
explore whether such an approach would be relevant and facilitate the exchange of 
quality data. This did not lead to firm conclusions but rather to different hypothesis 
regarding how to understand a taxpayer’s total capital and value, depending on the 
nature of his assets.  

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Related documents – List of questions sent to the experts 

Efficiency: impact of the AEOI on tax evasion and profit shifting   

Does  administrative  cooperation  and  the  exchange  of  tax  information  have  a  general 
impact on the fight against tax evasion and tax havens? 

After 10 years of CRS / DAC2, what lessons can be learned from this system, especially in 
terms of their impact on tax transparency?   

Have you evidence that it led to better compliance?   

Did it lead to new trends in concealing assets from the tax administrations? 

Relevance  of  DAC4:  transparency  in  transfer  pricing  policies,  change  in  the 
behaviour of multinational enterprises 

Do you think, or do you have any evidence to suggest that the CbCR (DAC4) declaration 
has promoted greater transparency in transfer pricing policies, or even a change in the 
behaviour of multinationals in tax management through profit shifting? 

EU added value and impact on EU competitiveness  

Could  mandatory  disclosure  rules  on  potential  aggressive  tax  planning  affect  the 
competitiveness of consulting firms that offer these arrangements?  

Could this affect the competitiveness of economic agents who have to comply with it?  

If so, is there an economic benefit that justifies this loss of competitiveness? 

Will  Pillar  2  put  an  end  to  aggressive  tax  planning  practices  by  multinationals  so  that 
Automatic exchange of information would be not necessary anymore? 

Efficiency and coherence of the DAC and possible challenges 

Is there a need for strengthening current provisions, particularly regarding the exchange 
of information on real estate owned by non-residents of other Member States  

Would be a European register of beneficial owners of real estate necessary?  

Do  you  think  such  a  measure  would  have  a  positive  impact  on  the  fiscal  resources  of 
Member States?  

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Annex XII  

ANNEX XII – TARGETED CONSULTATION WITH TAX LAW EXPERTS 

25 September 2024 

Minutes 

This  document  should  be  regarded  solely  as  a  summary  of  the  contributions  from  the 
experts interviewed for the targeted consultation in the framework of the Evaluation of the 
DAC. It cannot in any circumstances be regarded as the official position of the Commission 
or its services. Responses to the interviews cannot be considered as a representative sample 
of the views of the professionals or the EU population. 

OBJECTIVES 

•  A targeted panel of tax law experts was invited to comment specific points on the 
DAC to assess its effectiveness, its efficiency; the relevance and the coherence of 
its provisions; and its EU added value. 

SUMMARY OF THE DISCUSSIONS 

•  Efficiency: on deterrence effect of Automatic exchange of information (AEOI) 

provided for in the DAC 
i) 

The panel of experts confirmed the deterrent effect of the AEOI as regards 
to  DAC2  and  DAC6,  and  its  consequences  on  intermediaries  and 
businesses.  

In  particular,  the  experts  emphasised  the  effectiveness  of  DAC2  /  CRS  in 
disclosing  financial  assets  abroad. These  effects  are  considered  persistent  and 
well assimilated by taxpayers. 

Experts  indicated  that  they  had  also  perceived  a  change  in  the  attitude  of 
taxpayers regarding DAC6 arrangements in the latest years. More specifically, 
it was confirmed that it had an impact on large companies, leading some of them 
to set up very elaborated systems of internal due diligence given the broad scope 
of the Directive.  

To ensure consistent reporting, some legal firms have also developed important 
internal  guidelines,  to  take  account  of  the  differences  in  application  between 
Member States.  

However, it was stressed that the dissemination of knowledge about DAC6 is not 
homogeneous, including among legal experts.  

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Furthermore,  the  fact  that  DAC6  has  been  challenged97  in  terms  of  its 
compatibility with fundamental rights, its legal foundations and its complexity, has 
not made it easy to share best practices on the subject. 

ii) 

On a more forward-looking level, the possible impact of the Public CbCR 
Directive98 on tax behaviour was also mentioned. 

The potential reputational damage or the public reaction, especially from civil 
society groups (e.g. NGOs), media or policymakers, are factors that may have an 
impact  on  the  tax  behaviour  of  MNEs.  It  may  happen  if  the  public  CbCR  data 
reveals  a  (perceived)  mismatch  between  the  profits  and  taxes  paid  in  different 
jurisdictions,  or  a  low  overall  effective  tax  rate  (regardless  of  the  legal  and 
economic reasons behind it). 

The  relevance  of  combining  the  CbCR  (DAC4)  and  the  public  data  for 
compliance  aspects  was  stressed,  both  for  companies  (which  prepare  the  CbCR 
reporting and use it for the public CbCR), and for tax authorities (who use data for 
risk assessment). 

•  Relevance of DAC6: scope, and analysis of CJEU decisions 

On the question of legal professional privilege (LPP), experts agreed that lawyers 
benefit from a favourable approach in the EU Charter of Human Rights, on which 
the CJEU took its decisions about DAC6 on the matter in 2022 and 2024. 

More  specifically,  it  appears  that  in  the  latter  decision  of  the  CJEU  (Belgian 
Association  of  Tax  Lawyers  and  Others  (see  C-623/22),  the  analysis  of  the 
application  of  legal  professional  privilege99  under  DAC6  by  the  Court  seems  to 
create  three  different  categories  of  intermediaries,  with  rights  that  are  not 
similar: 

-  non-lawyer  intermediary  (who  cannot  ensure  legal  representation  of  their 
client in court) subject to DAC6 obligations (subject to reporting obligations / 
no waiver);  

-  non-lawyer  intermediary  bound  by  LPP  who  has  mandate  to  ensure  legal 
representation of their clients in court, who benefits from the waiver, and must 
notify other intermediaries and/or their client; 

97  DAC6 has been the subject of two lawsuits before the CJEU. (C-694/20, C623/22).  

98  Directive  (EU)  2021/2101  of  the  European  Parliament  and  of  the  Council  of  24  November  2021 
amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings 
and branches. Public CbCR is linked with the DAC as it provides for that Member States shall permit 
the information to be reported on the basis of the reporting instructions referred to in Section III, Parts 
B and C, of Annex III to Directive 2011/16/EU. 

99  “intermediary bound by LPP subject to criminal sanctions under the national law of that Member State” 

130 

 
 
- 

lawyer  intermediary  who  ensures  legal  representation  of  their  client  and 
who  benefits  from  the  waiver  due  to  LPP  and  has  no  obligation  in  terms  of 
notification, except to their client). 

The experts stressed that the Court chose a restrictive interpretation of the LPP. 
Hence, the concept of ‘professional secrecy’ (“secret professionnel”), wider than 
LPP per se, does not necessarily apply, which may, depending on the Member State, 
create  a  difference  in  treatment  between  lawyers  bound  by  the  LPP  and  other 
intermediaries concerned by DAC6 obligations. 

In conclusion, the experts stressed the importance of ensuring legal certainty in 
line with the Court's decisions. 

•  Relevance and coherence of DAC6: main benefit test and hallmarks 

i) 

The  definition  of  the  main  benefit  test  (MBT)  and  some  specific 
hallmarks  were  discussed,  and  their  flaws  or  inconstancies  described  in 
detail by the experts. 

As far as the main benefit test  is concerned, the question of its definition is the 
most open to criticism, mainly  because of the different interpretations within 
the  E.U.  The  lack  of  harmonisation  in  the  definition  of  the  Main  Benefit  Test 
(MBT)  in  DAC6  (Directive  on  Administrative  Cooperation)  is  considered  a 
shortcoming for several reasons: 

▪  Inconsistent application: different EU Member States may interpret and apply 
the  MBT  differently,  leading  to  inconsistencies  in  what  is  considered  a 
reportable arrangement. This can create confusion for multinational companies 
operating across multiple jurisdictions. 

▪  Increased  compliance  burden:  as  a  consequence,  companies  may  face 
increased compliance costs as they need to understand and comply with varying 
interpretations  of  the  MBT  in  each  Member  State.  This  can  be  particularly 
challenging for businesses with complex cross-border arrangements. 

▪  Legal uncertainty: the lack of a uniform definition can lead to legal uncertainty 
for  taxpayers  and  intermediaries. They  may  struggle  to  determine  whether  a 
particular arrangement needs to be reported, potentially leading to either over-
reporting or under-reporting. 

▪  Ineffective enforcement: without harmonisation, the effectiveness of DAC6 in 
combating tax avoidance and ensuring tax transparency may be compromised. 
Different interpretations can lead to loopholes that can be exploited by those 
seeking to avoid taxes and more specifically DAC6 reporting obligations. 
▪  Competitive  disadvantages:  intermediaries  and  businesses  operating  in 
Member States with stricter interpretations of the MBT may find themselves at 
a  competitive  disadvantage  compared  to  those  in  Member  States  with  more 
lenient interpretations 

131 

 
Overall,  harmonising  the  definition  of  the  MBT  across  the  EU  would  help 
ensure  a  more  consistent,  fair,  and  effective  application  of  DAC6,  possibly 
reducing compliance burdens and legal uncertainties for businesses. 

While setting a threshold in terms of the tax advantage obtained or a ratio could 
provide  a  quantitative  measure,  these  solutions  might  also  be  circumvented  by 
structuring  transactions  just  below  the  threshold.  Additionally,  such  measures 
might  not  capture  the  qualitative  aspects  of  tax  planning  that  the  MBT  aims  to 
address. 

The concept of MBT has also been rendered complex to apply in certain Member 
States insofar as it seems to imply a form of intentionality, a factor which may 
trigger criminal proceedings in the event of a tax audit, if the arrangement declared 
proves to be possibly illegal. This assumption tends to create a form of reluctance 
from intermediaries, with regard to the concept as such. 

ii) 

Some hallmarks appear to be more problematic than others.  

The comments focused on certain B (e.g. B2 and the definition of ‘conversion of 
income’), C and E (e.g. E3 and the concept of EBIT) hallmarks, confirming what 
has  been  reported  by  some  Member  States  and  private  stakeholders  previously. 
Experts also insisted that at this stage it would be preferable to clarify the existing 
hallmarks  to  improve  their  efficiency,  and  that  this  should  be  one  of  the 
Commission’s priorities on DAC6. 

When asked whether arrangements involving countries / territories outside the 
EU were to be included in the DAC6 report, it was noted that the lack of mention 
to these countries outside the EU may be a drafting problem of the DAC and an 
editorial oversight in Article 8ab (14) (g)100. 

•  Improving clarity and coherence: need for harmonised guidance 

The idea of common and harmonised guidance to establish a body of doctrine 
on DAC (and more specifically DAC6) was favourably received.  

Concerning its legal value, although this cannot be enforced (for example during a 
tax audit), the experts believe that it would nevertheless provide  clarification of 
problematic  terms  and  definitions,  particularly  regarding  hallmarks,  since 
concrete examples could be shared with the public.  

This  would  also  allow  Member  States’  administrative  instructions  to  be 
brought more consistent together and would help to clear up questions which at 
this stage lead to an excess of administrative burden.  

100 “The information to be communicated by the competent authority of a Member State under paragraph 
13 shall contain the following, as applicable: (…) the identification of the Member State of the relevant 
taxpayer(s) and any other Member States which are likely to be concerned by the reportable cross-border 
arrangement”. 

132 

 
 
It would still be up to the CJEU to have the last word if an interpretation based on 
this guidance were challenged. 

•  Simplification 

Both  experts  stressed  that  the  scope  and  objectives  of  recent  legislations  like 
Pillar 2 are different from those of DAC in general, and DAC6 in particular. 

Overall,  the  experts  were  very  cautious  about  any  additional  amendment  or 
waiver to specific categories or taxpayers in DAC, stressing the need for legal 
certainty and coherence over time. 

•  Use of automatic exchange of information 

The participants did not provide any specific comment to this point, leaving it to 
the Member States to define the appropriate policies in this area. 

Related documents – List of questions sent to the experts 
On deterrence effect of Automatic exchange of information provided for in the DAC 

Do  you  think  that  CRS  standards  (DAC2),  the  obligation  to  report  advance  rulings 
(DAC3), the country-by-country reports (DAC4), and the obligation to report aggressive 
cross-border arrangements  (DAC6) are likely to deter certain taxpayers  from using tax 
schemes that may affect the Member States' tax bases?   

Do you have any comments on taxpayers’ compliance behaviour, and the interaction 
between taxpayers’ behaviour and the reporting obligations under DAC? 

Relevance of DAC6: scope and analysis of CJEU decisions 

The  European  Union  has  a  special  reporting  obligation  for  aggressive  arrangements 
(DAC6). However, this exchange of information has been regularly challenged by certain 
tax  lawyers,  the  professions  of  advice,  law  and  number,  and  certain  professional 
organisations. The European Court of Justice has recently upheld the principles and the 
robustness  of  the  mechanism  in  place,  while  protecting  clearly  (but  only)  the  legal 
professional privilege - professional secrecy - of lawyers (C623/22).  

What is your analysis about the CJEU decisions on DAC6 (C-694/20, C623/22)?   

The Directive was amended in 2023 (to limit notification obligations), do you think it 
needs to be amended again?   

What points in DAC6 could be improved in view of these decisions?  

In particular, are there any hallmarks that could be reviewed to make the legislation 
more specific?  

Relevance of DAC6: Annex IV of DAC; MBT - Hallmarks  

Have you comments on hallmarks? 

Should arrangements involving countries / territories outside the EU make it mandatory 
for those jurisdictions to be included in the DAC6 declaration?  

Should there be new hallmarks in DAC6, and if so, which ones?  

Use of automatic exchange of information 

133 

 
Questions have been raised by the stakeholders about the use of automatic exchange data 
by administrations, particularly DAC6.   

What is your view?  

Should the use of DAC6 data by Member States be made more explicitly mandatory in 
the Directive?  

Ways of improving clarity and need for guidance 

Would it be relevant for DAC6 (e.g interpretation of hallmarks)?   

What could be the legal value of such a document?  

Simplification 

Would be legally relevant to provide for an exemption of DAC obligations for MNEs 
affected by Pillar 2 reporting? 

134