The evaluation concludes that the DAC has proven to be an effective and efficient instrument for administrative cooperation in taxation within the EU. While significant progress has been made, further efforts are required to simplify the framework, harmonise its application, improve the penalty regimes and enhance the use of data.  Based on previous communications, a first draft of the DAC recast proposal is expected to be published in Q2 2026  

Below we firstly outline the overall key findings of the evaluation as well as the Commissions intended actions. We then elaborate on the specific findings and action points with respect to the mandatory disclosure rules (commonly known as DAC6).  

Background

The DAC is a legislative instrument underpinning tax transparency and administrative cooperation among Member States. Since its adoption, the Directive has progressively expanded the scope of automatic exchange of information (AEOI), now encompassing a broad range of income categories (DAC1), financial account information (DAC2), cross-border tax rulings and advance-pricing agreements (DAC3), country-by-country reports (DAC4), beneficial ownership information (DAC5), reportable cross-border arrangements (DAC6), income from digital platforms (DAC7), crypto-assets (DAC8) and, more recently, filing and exchanging of Pillar Two-related information (DAC9). The DAC has aimed to establish harmonised reporting obligations and common IT infrastructures, taking into account confidentiality and privacy in the exchange of information.

Key findings

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. The mechanisms established under the DAC have contributed to strengthening Member States’ capacity to combat tax fraud, evasion, and avoidance. The cooperation framework is broadly coherent with other relevant EU and international initiatives. In addition, it provides EU added value compared to national or bilateral solutions. The evaluation of the European Commission further concludes the following:

  • Effectiveness: The DAC has enabled the exchange of substantial volumes of information, increasingly matched and utilised by tax authorities for risk assessment, control purposes, and to foster voluntary taxpayer compliance. The analysis indicates that the information obtained through DAC1 and DAC2 exchanges is generally timely, comprehensive, and of high quality, thereby strengthening tax authorities’ ability to monitor cross-border activities.
  • Efficiency: The costs associated with the DAC are commensurate with the benefits generated.
  • Coherence: The DAC is broadly coherent with other EU measures and complements other EU measures targeting money laundering, terrorist financing and VAT fraud. The DAC is also aligned with information reporting and exchange standards developed at international level.
  • EU added value: The DAC establishes a harmonised framework for tax cooperation, surpassing national or bilateral solutions in scope and effectiveness, and ensuring consistency with data protection requirements.
  • Relevance: The DAC remains highly relevant in addressing the challenges posed by globalisation and fighting against tax evasion, avoidance and aggressive tax planning. The DAC is a flexible tool for integration of new areas for cooperation and exchange of information.

Lessons learned and way forward

The evaluation identifies several areas for improvement, and the Commission will pursue the following actions:

  • Simplification and consolidation: The legal framework is robust, but fragmentation in application across Member States increases the administrative burden on businesses. This particularly regarding DAC6, which is considered the most complex and challenging to apply. The Commission will work to simplify and consolidate the DAC legal texts, enhance internal coherence, and clarify or streamline reporting obligations, particularly those under DAC6.
  • Improved penalties framework: Penalty frameworks for non-compliance with reporting obligations vary considerably between Member States, potentially undermining the level playing field. The Commission is willing to engage with Member States to assess and improve penalties regimes to ensure effective, proportionate, and dissuasive penalties for non-compliance.
  • Taxpayer identification: While data quality has improved, challenges remain in taxpayer identification and the matching of exchanged data. Efforts will be made to ensure full identification of taxpayers, including exploring the feasibility of an EU Tax Identification Number (TIN).
  • Systematic data use and traceability: The use of exchanged data is widespread but not yet systematic, and greater accountability and transparency in the use of DAC data are needed. The Commission will promote more systematic use of exchanged data and develop better traceability mechanisms.
  • Digital transformation: The IT systems supporting information exchange function effectively but require significant resources to operate and maintain, especially by Member States and stakeholders. The Commission will support digital transformation to enhance tax compliance and efficiency, including exploring the development of more centralised IT solutions.

DAC 6 evaluation

In addition to the overall findings on DAC, the evaluation devotes specific attention to DAC6, which is widely recognised as the most complex and challenging component of DAC. The key issues identified - largely categorised in (i) fragmented application and (ii) data use and quality - are not new and largely echo the concerns previously raised by the European Court of Auditors in its November 2024 report[1].

Fragmented application

The broad drafting of certain DAC6 provisions, designed to capture a wide range of potentially harmful cross-border arrangements, has led to significant interpretative challenges and inconsistent application across Member States. The main benefit test and hallmarks like A3, B2 and E3 are highlighted as sources of ambiguity. This lack of full harmonisation results in legal uncertainty, increased compliance costs, and an administrative burden for intermediaries and taxpayers.

The evaluation underscores a strong call for EU-level practical guidance on and examples on the application of hallmarks. In addition, stakeholders call for a reassessment of the relevance of certain hallmarks. Notably, Member States on the other hand, have proposed limited but targeted new hallmarks targeting inter alia dividend stripping schemes, conduit arrangements for treaty shopping or Directive shopping, hybrid mismatches, transfer pricing mismatches, real estate based arrangements, IP transfer and arrangements involving crypto assets.

Data use and quality

The evaluation highlights that the quality and completeness of DAC6 disclosures remain inconsistent. The main issue is the use of abstract data received in free-text format and the absence of a mandatory field in the DAC6 reporting scheme for identifying non-EU jurisdictions involved in cross-border arrangements. The latter limits the ability of Member States to fully assess the scope and risks associated with such arrangements.

Additionally, the reliance on abstract summaries and free-text fields complicates risk analysis and data matching, limiting the effective use of DAC6 data by Member States.

Commission’s way forward

In response to the evaluation’s findings, the Commission will pursue the following actions:

  • Recalibrating DAC6 framework: Assess the need for amendments to DAC6, particularly to the existing hallmarks, in order to clarify and streamline the reporting obligation.
  • Integration of ATAD3: Explore the feasibility of integrating the former Unshell proposal (also referred to as ATAD3)[2] into the DAC.
  • EU-level guidance: Develop and publish EU-level guidance to promote consistent interpretation and application of DAC6 provisions.
  • Data use: Facilitate the automatic reconciliation of DAC data with national data.

Should you have any questions following this publication, please feel free to contact your tax adviser within Loyens & Loeff or one of our experts.

[1] European Court of Auditors, Special report on Combatting harmful tax regimes and corporate tax avoidance, November 2024.

[2] Proposal for a Council Directive of 22 December 2021 (Doc. St. 15296/21) laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/EU. The European Commission has announced on 22 November 2025 that it intends to withdraw the ATAD3 proposal