CFE’s Tax Top 5 – 22 December 2025

BRUSSELS | 22 DECEMBER 2025

EU Commission Opens Consultation on Recast of the Directive on Administrative Cooperation

The European Commission has launched a call for evidence and public consultation on a recast of the Directive on Administrative Cooperation in the field of direct taxation (DAC), as part of its REFIT agenda and broader efforts to simplify EU law and reduce administrative burdens.

The initiative follows on from the Commission’s evaluation of DAC1–DAC6 published in June 2025, which concluded that the DAC framework has significantly strengthened Member States’ ability to combat tax fraud, evasion and avoidance, generating estimated net benefits of EUR 6.8 billion per year, but also highlighted growing complexity, fragmented implementation and persistent data-quality and compliance challenges, particularly under DAC3, DAC4 and DAC6.

Against this background, the Commission is consulting concerning a consolidation of DAC1–DAC9 into a single legal instrument, alongside targeted reform measures to streamline overlapping and duplicative reporting obligations (notably between DAC4 and DAC9 in the context of Pillar Two), improve the functioning and proportionality of DAC6, revisit thresholds under DAC7, enhance taxpayer identification and IT interoperability, and improve the completeness of information exchange. An impact assessment is planned, with a legislative proposal currently envisaged for Q2 2026.

CFE Tax Advisers Europe will contribute to the ongoing consultation and has already submitted an Opinion Statement in 2025 welcoming consolidation and simplification of the DAC framework, while calling for targeted rationalisation of DAC6 hallmarks, clearer sequencing rules to avoid duplicative reporting, alignment of DAC4 and DAC9 notifications, harmonised penalties and clearer treatment of legal professional privilege.

OECD Consultation on the Global Mobility of Individuals

Today marked the submission deadline of the OECD public consultation examining the tax challenges arising from the increasing global mobility of individuals, including cross-border remote working, short-term assignments and highly mobile professionals. The consultation sought stakeholder input on how existing international tax rules apply in these contexts, and whether further clarification, coordination or reform is needed to ensure tax certainty, fairness and administrability in a post-pandemic environment.

CFE Tax Advisers Europe published an Opinion Statement responding to the consultation, drawing on the practical experience of European tax advisers supporting individuals and employers engaged in cross-border mobility. The Statement observes that global mobility has intensified significantly, placing strain on domestic residence rules, tax treaty concepts and employment income provisions that were developed for more static working patterns. The Statement highlights that in practice, inconsistent interpretation of residence tests, days-count thresholds, permanent establishment concepts and employer obligations across jurisdictions can give rise to uncertainty, double taxation risks and disproportionate compliance burdens, particularly for remote workers and short-term assignees.

CFE calls on the OECD to provide clearer and more coherent guidance on the application of existing international tax rules to mobile individuals, with a focus on residence determination, remote working arrangements and employer compliance responsibilities. The Statement emphasises proportionality and administrability, especially in low-risk or short-term mobility scenarios, and highlights the importance of improved coordination between tax authorities, including effective dispute prevention and resolution mechanisms, to enhance tax certainty for taxpayers acting in good faith.

Separately, the Global Tax Advisers Platform, of which CFE is a founding member, has also submitted a detailed response to the same OECD consultation, reflecting the collective experience of tax advisers across multiple regions. The GTAP submission identifies persistent uncertainty around tax residence, employment income sourcing, employer withholding obligations and permanent establishment risk, as well as misalignment between tax, social security, company law and immigration frameworks. GTAP emphasises the need for internationally aligned safe harbours, clearer residence tie-breaker guidance, proportionate compliance thresholds and stronger coordination between tax authorities to reduce double taxation risks and administrative friction for mobile individuals and their employers.

Both submissions underline that while existing international tax principles remain broadly relevant, their application to modern mobility patterns is often unclear and inconsistent. They encourage the OECD to develop pragmatic, coherent and administrable guidance that reflects real-world working arrangements and supports tax certainty for taxpayers acting in good faith.

BEPS Action 5 Peer Review Reports on the Exchange of Information on Tax Rulings

The OECD has released its ninth annual peer review report under BEPS Action 5, examining the implementation of the minimum standard on the compulsory spontaneous exchange of information on tax rulings for the 2024 calendar year. The review assesses 139 Inclusive Framework members and jurisdictions of relevance, focusing on whether appropriate legal, administrative and operational frameworks are in place to identify rulings within scope and exchange information in a timely and standardised manner. The transparency framework applies to five categories of taxpayer-specific rulings that may give rise to BEPS risks, covering both certain past rulings and all future rulings, and operates through existing international exchange of information agreements subject to confidentiality safeguards.

The report notes continued high levels of activity, with more than 28,500 rulings cumulatively falling within scope since 2010 and over 2,300 new in-scope rulings issued in 2024 alone. By the end of 2024, approximately 64,000 exchanges of information had taken place, with around 5,500 exchanges carried out during the year under review. Most jurisdictions were found to be broadly compliant: 113 jurisdictions received no recommendations, and a further seven received only one recommendation. However, 46 recommendations for improvement were issued overall, largely relating to weaknesses in information-gathering processes, review and supervision mechanisms, delays in exchanges, or the absence of a fully effective domestic legal basis for spontaneous exchange.

The peer review also highlights the role of peer feedback, with 94 peer input questionnaires submitted, helping jurisdictions improve the clarity, completeness and timeliness of exchanged information. In several cases, jurisdictions took remedial action during or shortly after the review period, although changes implemented in 2025 are not reflected in the 2024 assessment and will be considered in subsequent reviews.

Joint Declaration Sets Out EU Legislative Priorities for 2026

The European Parliament, the Council of the European Union and the European Commission have issued a Joint Declaration on EU Legislative Priorities for 2026, setting out a shared commitment to place competitiveness, simplification and effective enforcement at the centre of the Union’s legislative agenda. The Declaration highlights the need to reduce regulatory and administrative burdens, accelerate adoption of priority files and ensure proper implementation of EU law, alongside progress on the next Multiannual Financial Framework (MFF) and the Own Resources Decision.

The legislative agenda includes proposals with direct relevance for corporate taxation and cross-border activity, notably the 28th Regime for Innovative Companies and the Savings and Investments Union initiatives. These measures aim to facilitate investment, support scale-ups and deepen the Single Market, potentially influencing the design of corporate tax regimes, incentives for innovation and the taxation of cross-border savings and investments.

Additionally, simplification is identified as a horizontal priority, with several Omnibus legislative packages scheduled for 2026 that may affect tax compliance environments. In particular, simplification proposals targeting SMEs and small mid-cap enterprises, digitalisation and artificial intelligence, chemicals, cybersecurity and data are intended to streamline obligations and improve coherence across EU legislation. While not tax-specific, these initiatives may indirectly impact corporate tax compliance, reporting obligations and administrative interaction with tax authorities.

Finally, the Declaration underlines the fiscal dimension of the 2026 agenda through planned MFF sectoral proposals and a continued focus on enforcement and conditionality mechanisms. Although no new tax measures are set out, the agreed priorities point to continued emphasis on tax-relevant simplification, budgetary coordination and revenue-related frameworks as part of the EU’s broader competitiveness and economic security agenda.

OECD Releases Updated FAQs on CRS & Crypto-Asset Reporting Framework

The OECD has published updated Frequently Asked Questions (FAQs) on the application of the Common Reporting Standard (CRS) and the Crypto-Asset Reporting Framework (CARF), with the aim of promoting consistent and effective implementation of the international standards for the automatic exchange of information in tax matters. The FAQs reflect questions raised by both business and government delegates and include new and updated clarifications.

In relation to CRS, the updates provide further guidance on the treatment of crypto-related and digital assets within the amended CRS framework, including clarification on when tokenised or digitally issued financial assets fall within the scope of CRS rather than CARF. The FAQs also address the classification and reporting of specified electronic money products, including stablecoins, and explain how changes in regulatory status during a reporting period should be treated. Additional clarifications relate to due diligence and reporting obligations, including aggregation rules, self-certifications, and the identification of controlling persons.

For CARF, the updated FAQs focus on operational and jurisdictional nexus issues, notably the application of the “regular place of business” test to branches of crypto-asset service providers. The OECD clarifies that, where a branch constitutes the highest nexus to a CARF-implementing jurisdiction, reporting obligations generally extend to all relevant transactions of the entity, subject to transitional exceptions during initial implementation. Further guidance is provided on the classification and reporting of tokenised assets, stablecoins, e-money products, non-fungible tokens, and complex crypto transactions such as wrapping, staking and collateralised loans.

The updated FAQs are intended to enhance legal certainty for both financial institutions and crypto-asset service providers, while supporting aligned implementation of CRS and CARF across jurisdictions as the international tax transparency framework continues to expand to digital and crypto-asset markets.

The selection of the remitted material has been prepared by:
Dr. Aleksandar Ivanovski & Brodie McIntosh