On 24 June 2026, the European Commission published its proposal to recast the Directive on Administrative Cooperation (DAC), consolidating DAC1 to DAC9 into a single framework while significantly revisiting the DAC6 mandatory disclosure regime.

Key proposed changes include:
• Reporting limited to arrangements that are actually implemented (rather than merely advised)
• Narrower definition of the relevant taxpayer, reducing duplicate reporting
• Removal of the distinction between marketable and bespoke arrangements
• Extension of the reporting deadline from 30 to 90 days
• Complete abolition of Category A hallmarks
• Exemption for groups subject to the 15% Global Minimum Tax, provided no arrangement reduces taxation below that threshold
• Simplified reporting under DAC7 and centralised filing for DAC4 and DAC9

One development deserves particular attention.

Although Hallmark D2, a tax-avoidance indicator covering deductible payments to low-tax related entities, remains unchanged, the proposal introduces future harmonised substance criteria, to be adopted through a Council implementing act within five years. Their content remains unknown, but they could significantly influence the assessment of cross-border holding and fund structures.

The proposal still requires unanimous approval by the Council, with implementation expected in stages from 2028.

If adopted, these changes should reduce unnecessary compliance burdens while preserving the objectives of tax transparency. However, several key aspects remain uncertain and will need to be closely monitored.

To discuss the potential implications for your Luxembourg structures, feel free to contact Mathieu Ledoux, Head of Tax at Value Partners.

ert a Value Partners.