DAC – EU Directive on Administrative Cooperation in the Field of Taxation

The Directive on Administrative Cooperation in the Field of Taxation (DAC) is the European Union's central legal instrument for the cross-border exchange of tax-relevant information between member states. It replaces the earlier Mutual Assistance Directive of 1977 and establishes a modern, systematised framework for tax administrative cooperation.

• Automatic information exchange: Mandatory annual exchange of financial and income data without prior request.
• Exchange on request: Authorities may specifically request information from partner authorities.
• Spontaneous exchange: Transmission of information foreseeably relevant to another member state's taxation.
• Joint audits: Coordinated tax audits across national borders.

The DAC forms the foundation for all subsequent amendments (DAC2 through DAC9) and aligns with international standards such as the OECD Common Reporting Standard (CRS).

The original EU directive on mutual assistance between member states in the field of direct taxation dates back to 1977 (Directive 77/799/EEC). With the deepening of the internal market and the rise of more complex cross-border tax arrangements, a more modern instrument became necessary.

On 15 February 2011, Council Directive 2011/16/EU (DAC1) was adopted and entered into force on 1 January 2013. It introduced for the first time mandatory automatic information exchange for certain income and asset categories. In subsequent years the directive was significantly extended by DAC2 (2014, financial account data under CRS), DAC3 (2015, tax rulings), DAC4 (2016, country-by-country reporting), DAC5 (2016, access to AML data), DAC6 (2018, intermediaries), DAC7 (2021, platform operators), DAC8 (2023, crypto-assets) and DAC9 (2024, minimum taxation).

The DAC applies to all 27 EU member states and covers in principle all direct taxes and other levies, except where individual amending directives provide otherwise. The primary obligated parties are national tax authorities; however, financial institutions, employers, platform operators and other third parties are indirectly involved as information providers.

• Automatic exchange of information on employment income, pensions, life insurance, real estate and director's fees.
• Obligation to respond to information requests from other member states within defined timeframes.
• Spontaneous transmission of tax-relevant information without prior request.
• Participation in joint audits and administrative enquiries.
• Compliance with data protection and confidentiality requirements in information processing.

1 correction:
- last_amended date wrong: Commission proposal instead of formal adoption