Tax Rulings — DAC3 and International Transparency

Tax rulings are binding or non-binding advance opinions from tax authorities on the tax treatment of a planned transaction or structure. They provide legal certainty for taxpayers but — as the LuxLeaks scandal (2014) demonstrated — can facilitate unfair tax competition when granted selectively or non-transparently.

• DAC3 (Directive 2015/2376/EU): Automatic exchange of cross-border advance tax rulings and advance pricing arrangements (APAs) in the EU
• BEPS Action 5: Spontaneous exchange of certain rulings as a minimum standard
• Transparency: Pre-existing rulings (from 2012) were exchanged retroactively

Tax rulings exist in various forms in most tax systems. International attention increased dramatically following the LuxLeaks scandal (November 2014), when thousands of secret tax arrangements between Luxembourg and multinational companies were disclosed. The European Commission tabled a proposal in March 2015, which the Council adopted on 8 December 2015 as DAC3 (Directive 2015/2376/EU), introducing the automatic exchange of cross-border rulings from 1 April 2016. In parallel, the OECD adopted BEPS Action 5, establishing spontaneous exchange of certain ruling categories as a minimum standard.

The DAC framework has continued to evolve: DAC8 (Directive 2023/2226/EU, adopted on 17 October 2023) extended automatic exchange of information to crypto-assets and e-money and represents the most recent addition to the DAC framework.

DAC3 covers all cross-border advance tax rulings and APAs issued, amended or renewed from 1 January 2017 onwards (or issued between 1 January 2012 and 31 December 2016 and still valid on 1 January 2014). Covered rulings include:

• Rulings on tax advantages or exemptions (e.g. IP box regimes)
• APAs and unilateral advance transfer pricing arrangements
• Rulings on PE existence or attribution
• Rulings on hybrid structures with at least one cross-border effect

• Automatic exchange of cross-border ruling information with all EU Member States within 3 months after the end of the half-year in which the ruling was issued
• Notification to the OECD Secretariat (BEPS Action 5) for rulings outside the EU
• Content of exchange: taxpayer, transaction description, amount, countries involved, duration
• Retroactive exchange: rulings from 2012–2016 were also exchanged
• Member States must maintain a central directory of all reported rulings (access: Commission and all Member States)

2 corrections:
- Inconsistency: summary says 2010, scope says 2012 for retroactive exchange
- Retroactive exchange starts from 2012, not 2010
1 update:
- Missing reference to DAC8 (crypto-assets, 2023)
2 clarifications.