ERT Response to call for evidence on DAC recast

The European Round Table for Industry (ERT) appreciates the European Commission’s initiative to review and recast the Directive on Administrative Cooperation (DAC). We fully endorse the Commission’s political objective, outlined in the Long-Term Competitiveness Communication, to reduce administrative burdens associated with reporting requirements by 25%.

In an increasingly complex global economic environment, tax transparency is essential. However, it must be balanced with efficiency and proportionality. The current DAC framework has evolved through successive amendments into a dense web of overlapping obligations. This has created a compliance environment where the administrative cost to businesses often outweighs the actionable value delivered to tax administrations. In particular, it is not clear to the taxpayer how much the DAC framework adds to the goal of transparency and fairness. The “benefit” amount of € 6.8 billion generated by DAC is not substantiated.[1]

This recast, encompassing all DAC directives (DAC1 to DAC9), is a critical opportunity to reverse that trend. It should not merely consolidate existing texts but fundamentally streamline the acquis to support the EU’s competitiveness goals.

ERT calls on the Commission (in line with its own findings in its report to the European Parliament) to prioritise quality over quantity in data exchange, ensuring that reporting obligations are targeted, harmonised, and stripped of redundancy. This includes the recommendation to embed a risk-based design principle across the DAC framework with reporting obligations focussing on high-risk transactions.

Our specific recommendations are detailed in the paper.