A Commission staff working document published on 24 June 2026 argues that EU-level action is necessary and proportionate for the recast of the Directive on Administrative Cooperation in Taxation (DAC), concluding that cross-border tax fraud, evasion and avoidance cannot be tackled by Member States alone. The subsidiarity grid, accompanying the Commission's proposal for a Council Directive, asserts that bilateral action would fragment the Internal Market and harm competitiveness, making EU intervention essential under Articles 113 and 115 TFEU.
The document draws on a 2025 DAC evaluation, two European Court of Auditors Special Reports (2021 and 2024), external studies, Member State working groups, and a public consultation that received 60 responses by 10 February 2026. It argues that EU action provides added value by ensuring uniform, coherent rules, common IT tools, and reporting standards such as XML schema, which create economies of scale and reduce administrative burdens. The Commission maintains that the changes are targeted, preserve existing safeguards, and do not lower protection against tax fraud, while Member States retain control over internal tax administration organisation.
On costs, the document estimates that a centralised TIN verification system would require EU one-off expenditure of EUR 1.0–1.8 million and recurrent costs of EUR 1.8–2.4 million per year. National one-off costs are estimated at EUR 15–25 million, with recurrent costs of EUR 4.5–12 million per year. However, net savings of up to EUR 70 million per year are projected from reduced correction efforts, benefiting tax authorities and compliant businesses by lowering compliance costs.
The proposal impacts several stakeholders. EU tax authorities would gain improved tools for cross-border cooperation but face upfront investment costs. Businesses operating across borders would benefit from streamlined reporting and reduced correction burdens, though they may need to adapt to new IT systems. Taxpayers would see more effective fraud prevention, potentially reducing tax evasion. The EU institutions would strengthen their role in tax governance, while Member States retain flexibility in domestic implementation.
The Council will now examine the proposal, with the European Parliament to be consulted. The recast aims to update the existing DAC framework to address evolving tax challenges and enhance administrative cooperation across the EU.