European Commission Proposes Streamlined Pillar Two Filing System for Multinationals in the EU

On October 28, the European Commission unveiled a proposal aimed at simplifying the reporting obligations of multinationals operating across the European Union under pillar two tax requirements.

The new directive, referred to as DAC9, would require qualifying multinational corporations to submit only a single “top-up tax information return” at the group level, rather than individual filings in each EU country where they have operations.

Currently, each EU-based entity within a multinational group would need to submit its own top-up tax return in the respective member state. With the DAC9 proposal, however, this process would be centralized, enabling one consolidated filing to meet compliance obligations throughout the EU.

To facilitate this system, the Commission plans to establish a mechanism for member state tax authorities to exchange tax data. A standardized form will also be introduced for in-scope companies, with the Commission noting that it would be “enabled” to update the form in accordance with any future international amendments to “ensure swift alignment.”

The directive is currently awaiting approval from the European Council. Once adopted, all EU member states will have until December 31, 2025, to implement the DAC9 requirements. For countries that have yet to implement the pillar two directive, including Estonia and Latvia, this deadline will also apply.

According to the pillar two framework, EU nations may defer the minimum tax requirements for up to six years if 12 or fewer companies in their jurisdiction are subject to the tax. The Commission reminded applicable multinationals that they must submit their initial top-up tax returns by June 30, 2026, in line with the directive’s guidelines. The information is to be shared among relevant tax authorities by December 31, 2026, ensuring inter-member state transparency. 

By fLEXI tEAM