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  COM(2025) 695 final  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 {SWD(2025) 365 final}  
 
 
1.  Introduction 

The EU remains committed to strengthening the fight against cross-border tax fraud, evasion and 
avoidance in order to ensure that the fair share of taxes is paid in the EU. This requires effective 
cooperation between the Member States’ tax administrations.  

Direct taxation rules are mostly governed at national level, but businesses operating in a globalised 
economy have greater opportunities to exploit inconsistences between rules in order to shift profits 
and avoid taxation, thus damaging other countries’ tax bases. The increasing mobility of people 
and capital has made it easier for individuals to work and invest in other EU Member States. This 
evolving landscape poses ongoing challenges to tax administrations because taxpayers in the EU 
are normally required to declare their global income in their country of residence. National tax 
administrations  cannot  act  alone  effectively  in  such  circumstances,  so  EU-wide  cooperation  is 
necessary.  

Since the adoption of Directive 2011/16/EU (the DAC or DAC1), considerable progress has been 
made in providing Member States with comprehensive harmonised tools to ensure that they can 
cooperate efficiently in the area of direct taxation. These tools include exchange of information 
(on  request,  automatic  and  spontaneous)  as  well  as  other  cooperation  instruments  (presence  in 
administrative offices or during administrative enquiries, simultaneous controls and joint audits). 

The  introduction  of  automatic  exchange  of  information  (AEOI)  i.e.  the  systematic 
communication of pre-defined information from the tax administration of a Member State to the 
tax administration of another Member State without prior request is one of the most significant 
developments in administrative cooperation.  

The EU has been a frontrunner in this respect  and, since 1 January 2015, information has been 
automatically exchanged, on five categories of income and capital i.e. income from employment, 
pensions, directors’ fees, life insurance products, and ownership of and income from immovable 
property  (DAC1)1.  These  are  information  that  tax  authorities  should  in  principle  have  in  their 
systems  and are,  more or less,  readily available to them. The DAC has since been  amended to 
expand the scope of AEOI, in line with international developments, to include: (i) financial account 
information  (DAC2)2;  (ii) cross-border  tax  rulings  and  advance-pricing  agreements  (DAC3)3; 
(iii) country-by-country reports (CbCR) (DAC4)4; (iv) reportable cross-border arrangements that 
indicate potential tax avoidance) (DAC6)5; (v) income received from use of platforms (DAC7)6; 
and (vi) crypto assets and e-money (DAC8)7. Other amendments have authorised tax authorities 
to access certain anti-money-laundering information (DAC5) and, extended the scope of AEOI to 
include  royalties,  non-custodial  dividends  and  cross-border  rulings  related  to  individuals.  The 

1 DAC1 AEOI first exchange by 30. 6. 2015 for the year 2014. 
2 DAC2 first exchanges by 30. 9. 2017 for the year 2016. 
3 DAC3 first exchanges by 30. 9 2017, central directory in use since January 2018.  
4 DAC4 first exchanges by 30. 6. 2018 for the year 2016. 
5 DAC6 first exchanges by 31. 8. 2020. 
6 DAC7 first exchange by 29. 2. 2024 for the year 2023. 
7 DAC8 first exchange by 30. 9. 2027 for 2026. 

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latest amendment (DAC9)8 provides for the exchange of information required by the Pillar Two 
Directive.  

The  expansions  of  the  scope  of  AEOI  after  DAC1  was  coupled  with  the  introduction  of 
harmonised reporting obligations for specific categories of entities (e.g. financial institutions, 
multinational companies, tax intermediaries, digital platform operators, etc.) which are required to 
share the information with their tax administrations so that they could, in turn, exchange it among 
themselves. Information is exchanged between Member States using common IT schemas and 
common  IT  infrastructures  which  are  provided  by  the  Commission,  and  which  ensure 
confidentiality and privacy. While information is generally exchanged on a bilateral basis, as far 
as DAC3, DAC6 and DAC8 are concerned, information is exchanged via a central directory to 
which all Member States have access.   

2.  Evaluation conclusions  

Article 27 of the DAC requires the European Commission to submit a report on its application to 
the European Parliament and the Council every five years from 1 January 2013.  

At  the  end  of  2017,  the  Commission  published  its  first  multiannual  report  on  DAC. This  was 
followed by a report on automatic exchange of information in December 2018. The Commission 
published first comprehensive evaluation of DAC in 2019, covering the period from 2013 to 2017. 
The key findings of the evaluation were that (i) the DAC provisions were implemented but not all 
of the measures were implemented effectively; (ii) the exchange of information under DAC had 
significantly increased the amount of data available to tax administrations  but  their capacity to 
manage  this  data  had  not  increased  at  the  same  rate;  and  (iii) the  assessment  of  benefits  was 
extremely limited due to the lack of available statistical information.  

This  second  evaluation  report  covers  the  period  from  2018  to  2023.  It  is  supported  by  an 
accompanying staff working document (the SWD) which is based on the findings of an external 
study ,  the  results  of  public  and  targeted  consultations  undertaken  by  the  Commission,  data 
provided by Member States and other inputs such as the outcome of relevant  work undertaken 
under the Commission’s Fiscalis programme. 

The scope of the present evaluation includes all the amendments to the DAC up to and including 
DAC6. Only qualitative information is provided for DAC7 because the first relevant exchanges 
only took place in February 2024 and complete statistical information is therefore not yet available. 
This evaluation does not consider later amendments to the DAC. In addition, as a result of the 
amendments to Article 27(2) of the DAC introduced by DAC8, the current evaluation also covers 
the relevance of the DAC6 hallmarks for the exchange of information on potentially harmful cross-
border arrangements. 

The evaluation concludes that the DAC provides a robust, evolving and relatively agile legal 
framework  that  facilitates  close  administrative  cooperation  between  Member  States  tax 
authorities.  Overall,  the  DAC  mechanisms  have  effectively  and  efficiently  contributed  to 
strengthening Member States’ ability to fight tax fraud, evasion and avoidance. The cooperation 

8 DAC9 first exchange from 1. 12. 2026 for the year 2024. 

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framework provided by the DAC works efficiently but this is at the cost of  major efforts and 
investments on the part of the various stakeholders, notably Member States’ tax authorities and 
the business. The DAC is broadly coherent with other relevant EU and international initiatives, 
provides EU added value compared to national or bilateral solution and is still very relevant as a 
policy intervention.   

An overview of the main results of the evaluation on each of the five Better Regulation criteria is 
provided below.  

Effectiveness 

The evaluation concludes that the DAC has facilitated the exchange of  substantial volumes of 
information  that  are  increasingly  matched  and  used  by  tax  authorities,  both  for  risk 
assessment and control purposes and to foster voluntary taxpayer compliance, which has a positive 
effect on Member States’ tax bases and revenues.   

Timeliness, completeness and quality of the information are the three main driving factors of 
effectiveness as they influence Member States’ ability to use the information received. The analysis 
shows that, especially the information received from DAC1 and DAC2 exchanges, is generally 
timely, complete and of good quality, enhancing tax authorities' capacity to monitor cross-border 
activities. 

As far as DAC3 and DAC4 are concerned, while the information exchanged is generally timely, 
there are some issues related to the completeness of the information, particularly due to incomplete 
TINs and insufficient detail in the summaries of advance cross-border rulings. Some issues have 
also been identified in relation to the quality and completeness of DAC6 information.  

Efficiency 

The DAC presents a positive cost-benefit ratio, where the costs associated with the DAC are 
commensurate with the benefits generated. 

The  annual  recurring  adjustment  costs  and  administrative  costs  related  to  the  DAC  are 
estimated at approximately EUR 646 million for all stakeholders (i.e. private stakeholders and tax 
authorities). 

A large part of the administrative costs is accrued by business (EUR 604 million), with the largest 
share  relating  to  DAC2  reporting  obligations  (EUR 550  million).  The  annual  costs  on  tax 
authorities are approximately EUR 42 million, the greater part of which is linked to AEOI. For 
tax authorities, DAC1 and DAC2 generate the highest costs. 

The DAC’s overall benefits are estimated at around EUR 6.8 billion per year.  

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. These  benefits  flow  to  national  tax 
authorities.  

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Coherence 

The evaluation concludes that the DAC is broadly coherent with other relevant EU initiatives 
and that it complements the objectives of other EU measures that target  money laundering and 
terrorist financing  (the AML Directive) and VAT  fraud (Council Regulation  (EU) 904/2010). It 
also notes that further synergies with those measures could be explored.  

The  DAC  is  also  broadly  aligned  with  the  information-reporting  and  exchange  standards 
developed  at  international  level.  This  alignment  ensures  consistency  in  the  approach  Member 
States  take  towards  international  tax  compliance.  By  aligning  with  international  standards,  the 
DAC facilitates integration into broader international tax cooperation efforts, thereby enhancing 
its effectiveness in curbing tax evasion and avoidance on a global scale. 

EU Added Value 

The DAC provides substantial EU added value by establishing a harmonised framework for tax 
cooperation that surpasses other existing national or bilateral solutions in scope and effectiveness.  

Firstly, the DAC 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 mandating automatic exchange of information, the DAC ensures that all  Member 
States  have  access  to  critical  tax  information.  This  significantly  reduces  opportunities  for  tax 
avoidance  strategies  that  exploit  disparities  between  national  tax  systems  and  enhance 
transparency across the entire EU.  

Thirdly,  the  common  IT  infrastructures  established  under  the  DAC  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. 

Finally,  in  relation  to  international  standards,  the  DAC  ensures  a  coordinated  approach  to 
implementation and application which safeguards the functioning of the Internal Market. 

Relevance 

The DAC remains highly relevant and critical to the fight against tax evasion, avoidance and 
aggressive  tax  planning  as  it  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.  

Moreover,  the  DAC's  alignment  with  global  standards  ensures  that  the  DAC's  objectives 
complement international efforts to create a level playing field in global tax compliance. By doing 

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so, the DAC not  only  enhances the ability of EU Member States  to  combat tax avoidance  and 
evasion but also strengthens the EU’s position in global tax policy.  

3.  Lessons learned 

The evaluation has highlighted the following lessons learned. 

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

The  evaluation  concludes  that  the  DAC’s  legal  framework  is  robust  but  that  the  frequency  of 
amendments since 2011 has made the legal text more complex and less user-friendly. 

The current evaluation is the first opportunity for an in-depth analysis of DAC 6. This has in turn 
prompted most feedback from stakeholders. Private stakeholders and tax authorities alike agree 
that DAC6 is the most challenging part of the DAC to apply due to its complexity and the scope 
for  differing  interpretation  by  the  Member  States.  Some  issues  may  decrease  with  time 
(e.g. overreporting and underreporting), but they are unlikely to disappear altogether due to a lack 
of harmonisation of taxation policy across the EU. It should also be noted that some provisions 
(e.g. the ‘main benefit test’ and some hallmarks) were drafted broadly in order to ensure sufficient 
coverage of all potential harmful cross-border arrangements. This creates interpretative challenges 
for both Member States and intermediaries, leading to the DAC being inconsistently applied and 
therefore  to  legal  certainty and level  playing field  issues,  which in turn increase administrative 
burden. The European Court of Auditors (ECA) has also highlighted the inconsistent application 
of DAC6 in its November 2024 special report on ‘Combatting harmful tax regimes and corporate 
tax avoidance tax regimes and corporate tax avoidance’. Finally, business stakeholders and, to a 
lesser extent, tax administrations  consider some of the  DAC6  hallmarks  to  be  no longer fit for 
purpose. 

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

Article  25a  of  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 January 2021 special report on ‘Exchanging tax information in the EU’, the ECA highlighted 
the risk that the penalties applied by Member States do not create a sufficient deterrent effect to 
ensure full compliance with the DAC2 reporting requirements. The Commission analysed Member 
States’ penalties regimes as part of the impact assessment for DAC8 and made a proposal as part 
of DAC8 to introduce minimum penalties for reportable offences. However, the Council did not 
accept this amendment.  

The evaluation concludes that the issue remains relevant. The ECA’s November 2024 special report 
supports  this  conclusion.  The  ECA  recommended  that  the  Commission  should  initiate 
infringement  proceedings  in  cases  where  there  is  sufficient  evidence  that  Member  States  are 
implementing a manifestly inadequate penalty system for breaches of the DAC6. 

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

The quality of the data improved between 2018 and 2023, especially for DAC1 and DAC2, and 
this is noted as one of the most significant developments since the previous evaluation. As regards 
DAC3 and DAC6, the main issue is the use of abstract data received in free-text format. 

Specific to DAC6, the reporting schema does not mandate the identification of non-EU countries 
involved in a cross-border arrangement. It is therefore difficult for the Member States to ascertain 
whether non-EU jurisdictions are involved and, if so, to identify them. 

Despite the progress made, there are still issues with the matching of data. The study reports that 
a small percentage (between 5-15% for DACs 1-4) of data cannot be matched. Inability to match 
data means that tax administrations have to request or provide manual feedback to other Member 
States. This is disproportionately resource-intensive and expensive and significantly increases the 
administrative burden on tax administrations. 

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

The Member States significantly increased their use of the data received under the DAC during 
the evaluation period, but the situation is not the same for all DACs. Tax authorities make extensive 
use of DAC1 and DAC2 information to establish or re-assess tax bases or to corroborate taxpayers’ 
tax returns, but the data exchanged under DAC3, DAC4 and DAC6 is more suitable to risk analysis 
tasks that are intended to identify the existence of a tax evasion scheme.  

There  has  been  a  reported  increase  in  the  use  of  the  data  received,  but  Member  States  are  not 
effectively monitoring or publishing the outcomes resulting from the use of data. The 2021 ECA 
report identified the need to increase the transparency and visibility of the achievements and results 
obtained under the DAC. The ECA called for a common EU framework to monitor administrative 
cooperation  activities  in  order  to  better  measure  the  outcomes.  However,  while  greater 
transparency is desirable, it is understood that it is difficult to accurately attribute results to data 
received under DAC, mainly because national tax administrations do not use the data in isolation. 
In  fact,  the  data  is  usually  combined  and  supplemented  with  national  data  to  provide  a  more 
complete picture of a taxpayer’s situation. For instance, risk assessments carried out by Member 
States’ tax administrations may build on information from national sources as well as from several 
DACs. The risk assessment itself may not lead to increased tax revenue or any quantifiable result. 

The  IT  information-exchange  systems  work  but  require  a  significant  allocation  of  resources  to 
operate them  

Overall, the information systems made available by the Commission and the Member States have 
not been directly criticised. However, the frequency of amendments since 2011 has put pressure 
on both Member States and stakeholders when setting up and maintaining information-reporting 
and exchange systems.   

The DAC provides one single harmonised reporting framework, but separate IT architecture must 
be  developed  in  each  Member  State,  and  this  requires  significant  cost  and  resources  for  all 

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stakeholders. There is therefore a strong interest in a comprehensive digital transformation, with a 
view to simplifying procedures and reducing costs. 

4.   Way forward 

Based on stakeholder input and the lessons learned in the evaluation exercise, the Commission 
will, as appropriate, explore or take, in consultation with the relevant stakeholders, the following 
actions  to  further  improve  the  DAC’s  functioning,  thereby  ensuring  that  it  fully  achieves  its 
objectives. 

Simplifying the DAC and ensuring its consistent application to reduce administrative burden 

Combating  tax  evasion,  avoidance  and  aggressive  planning  remains  very  high  on  the 
Commission’s agenda for ensuring fair taxation and a well-functioning internal market. However, 
a  clearer,  simpler  and  more  coherent  framework  which  is  interpreted  and  applied  consistently 
across  the  Member  States  will  improve  the  EU’s  competitiveness  by  reducing  administrative 
burden and increasing legal certainty for stakeholders. Three measures will help to achieve these 
objectives. 

Firstly, it is crucial to make the different DAC legal texts clearer by consolidating them. 

Secondly and in the context of the wider simplification agenda, the Commission will assess the 
scope for increasing the overall internal coherence of the DAC legal framework – by eliminating 
possible duplications and inconsistencies, and by exploring the options to streamline or eliminate 
reporting obligations that could be unnecessarily burdensome.  

As  regards  DAC6,  the  Commission  will  carefully  analyse  and  assess  the  need  for  possible 
amendments, particularly to the existing hallmarks, which could be clarified and streamlined while 
ensuring that the system remains robust in its objectives and is not weakened by the amendments. 
The Commission will also explore the feasibility of integrating into the simplified DAC framework 
the  principles  and  concepts  extensively  examined  by  Council  under  the  former    UNSHELL 
proposal.  

Thirdly, to reduce discrepancies in the DAC’s interpretation and application by Member States, 
the Commission will (in cooperation with the Member States) develop and then publish EU-level 
guidance on the most recent amendments to the DAC. It will do this more systematically for any 
future amendments.  

Improve the penalties framework for the DAC 

A  robust  penalties  framework  is  essential  in  order  to  ensure  compliance  with  the  reporting 
obligations under DAC2, DAC4 and DAC6. Discrepancies in the penalties framework introduced 
by Member States risk undermining the level playing field and can result in an uneven application 
of the DAC across the EU. 

To address this issue, the Commission is ready and willing to engage with Member States to assess 
the  penalties  regimes  in  place  and  to  identify  ways  in  which  these  could  be  improved,  in 
accordance with the obligations under EU legislation.  

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Ensuring full identification of taxpayers by means of an EU tax identification number (TIN) 

Additional work is required so that Member States’ tax administrations can make further progress 
in matching the data received by means of information exchange and ensure  a more automated 
identification of taxpayers. The aim is to achieve a 100% matching rate.  

The crucial role of the taxpayer identification number (TIN) in identifying taxpayers means that it 
is appropriate to explore a more coordinated approach for taxpayer identification at EU level. The 
Commission  recently  launched  a  study  on  a  possible  solution  to  the TIN  issue. The  study  will 
assess the legal and technical feasibility as well as the potential costs/benefits of establishing a 
common  identifier  (an  EU TIN),  based  on  existing  identification  numbers. The  study  will  also 
explore  ways  to  provide  a  centralised  tool  to  enable  tax  authorities  and  economic  operators  to 
validate the conformity of the EU TIN and check the identity of the taxpayer in a less resource-
intensive way by using automated tools.  

Increasing the systematic use of data and developing better traceability 

Tax administrations need to more systematically use the data received under the DAC for domestic 
tax procedures. Without routine use, most of the costs remain but the benefits are not maximised.  

Some information received under the DAC is used to pre-fill tax returns. This is a recommended 
use of data and should be encouraged, but it requires the receipt of timely high-quality data and an 
efficient matching mechanism. More generally, data received from DAC should automatically feed 
into national risk analysis systems. This requires design improvements for national risk analysis 
systems, considering best practices, and exploring techniques and technologies that enable real-
time use of DAC data. This further emphasises the quality of IT infrastructures in the Member 
States and their capacity to accommodate such systems.  

Improving  the  estimation  of  the  results  of  administrative  cooperation  in  the  EU  requires  the 
implementation of indicators and follow-up work to raise public awareness. The Commission will 
consider ways to make the use of the key performance indicators for measuring the outcome of 
DAC1-4 that were agreed at the Tax Administration European Union Summit (TADEUS)  more 
binding. Member States are also encouraged to develop initiatives to raise awareness of the role 
and outcome of administrative cooperation (particularly AEOI).  

The  annual  report  on  the  outcome  of  the  administrative  cooperation  in  direct  taxation  should 
include a summary publication of the outcomes and impacts of use of exchanged data.  

Enhancing tax compliance and efficiency through digital transformation  

Digital transformation is an important driver to improve the efficiency of tax administrations. It 
could be used to further increase the interoperability of information systems to ensure that Member 
States’ systems can communicate effectively with each other and with reporting persons.   

Looking ahead and with a view to simplifying and rationalising the existing IT architecture that 
supports the reporting and exchange of information under the DAC, the Commission could explore 
the feasibility and assess the costs/benefits of developing a more centralised approach. This could 
consist  in  setting  up  a  single  access  point  for  exchanging  and,  potentially,  also  reporting 

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information  under  the  DAC. That  would  replace  the  need  for  tax  administrations  to  frequently 
exchange information. It would also make it possible to centrally identify reporting entities so that 
information would only have to be reported once.  

Such a central system could bring significant savings both for Member States and for reporting 
entities persons because it would allow economies of scale and a rationalisation of IT investment. 
It could increase the overall agility of the IT reporting and exchange framework because changes 
could be implemented faster on a single framework than on the 27-Member-State IT framework. 
It could also contribute to achieving other objectives related to the DAC, particularly in terms of 
enhancing data quality. 

5.  Conclusions 

The  DAC  provides  a  robust  legal  framework  which  has  facilitated  the  exchange  of  substantial 
volumes of information that is increasingly being matched and used by tax authorities (both for 
risk assessment and for control purposes) and has fostered voluntary taxpayer compliance. The 
DAC works effectively and efficiently, and the costs associated with it are commensurate with the 
benefits generated. The DAC is broadly coherent, it has added value compared with national and 
international alternatives and it remains very relevant to achieving its objectives.  

Despite the substantial progress made since the previous evaluation, there are still several areas 
where further work should be done in the short term to further enhance the DAC’s functioning, 
while  reducing  the  administrative  burden  on  business.  This  can  be  achieved  through  (i) well-
designed simplification (without undermining the DAC’s objectives); (ii) improving the penalties 
framework  related  to  the  DAC;  (iii) facilitating  the  automatic  reconciliation  of  DAC  data  with 
national data; and (iv) ensuring the consistent application of the DAC across the EU. Work should 
also continue in order to enhance the use of data and to design a robust and automatic identification 
of taxpayers.  

In the long term, it will be necessary to explore how to rationalise IT systems and better exploit 
the digital transformation to improve risk analysis while also ensuring cost-savings for Member 
States and reducing the administrative burden on business. 

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