Key Taxation Changes in the EU Around 2026
There are several important EU tax-directive changes coming into effect (or being phased in) around 2026 and beyond. Below are the key updates — and their implications for Member States. Some relate directly to 2026, others have start dates later, but they form part of a coherent reform push.
1. DAC8 – Crypto-asset reporting (Automatic Exchange of Information)
The EU’s Directive on Administrative Cooperation (DAC8) mandates enhanced transparency for crypto-assets.
Timeline: Member States must transpose DAC8 by 31 December 2025, and its provisions apply as of 1 January 2026.
What changes: Reporting Crypto-Asset Service Providers (RCASPs) (e.g., exchanges, custodial platforms) must collect detailed user and transaction data (e.g., transfers, exchanges, stablecoins, NFTs) and report to tax authorities.
Exchange between tax authorities: Data collected will be shared across Member States so that tax authorities can track crypto-asset holdings and transactions.
Implications:
For tax authorities: Greater ability to detect undeclared crypto-income, capital gains, or other crypto-asset-based tax bases.
For service providers: Must set up due diligence, data collection, and reporting systems.
For taxpayers: Individuals with crypto holdings/transactions will be under more scrutiny. Non-compliance could trigger questions or audits.
2. DAC9 – Minimum Effective Corporate Tax (Pillar 2)
The EU adopted a new directive, DAC9, to support cooperation and information exchange regarding the Pillar 2 (global minimum tax) rules.
What it does:
Introduces a centralized “top-up tax information return” (TTIR) for large multinational enterprise (MNE) groups (those subject to Pillar 2).
Instead of each local entity filing separately, one entity (often the parent) can file centrally.
Extends automatic exchange of that TTIR data between Member States.
Deadlines:
Member States must adopt DAC9 by 31 December 2025.
First TTIR filings are due by 30 June 2026.
Relevant tax authorities must complete the data exchange by 31 December 2026.
Implications:
Transparency: Enhanced visibility for tax authorities on MNEs’ effective tax rates across the EU. Administrative burden: Although reporting is centralized (reducing duplication), MNEs will need to ensure compliance, consolidating group-level data.
Enforcement: Supports the EU's implementation of the global minimum tax (15%) and reduces base erosion and profit shifting (BEPS).
3. VAT in the Digital Age (ViDA) Package
This major reform of EU VAT rules was formally adopted by the EU Council on 11 March 2025.
Main components:
1. Digital reporting (e-invoicing): Real-time digital reporting for cross-border B2B transactions via e-invoicing; replacing older reporting methods.
2. Platform economy VAT: Online platforms (e.g., for short-term accommodation or passenger transport) will, in many cases, become responsible for charging and remitting VAT when providers themselves do not.
3. Expanded One-Stop-Shop (OSS): The OSS regime will be broadened, making it easier for businesses to declare VAT in one place, reducing the need for multiple VAT registrations across Member States.
Rollout timeline: The package will be phased in progressively until January 2035.
Implications:
Reduced fraud: Digital reporting and e-invoicing help combat VAT fraud (especially carousel fraud).
Administrative simplification: OSS expansion lowers the burden on businesses operating cross-border.
Tax base growth: Potential increase in VAT revenue as more economic activity (especially on platforms) is more tightly monitored.
4. Electronic VAT Exemption Certificate
The Council has agreed a directive to introduce an electronic VAT exemption certificate, replacing the traditional paper version.
Scope: Used for VAT-exempt transactions (e.g., goods for embassies, international organizations).
Transition: There will be a phase where both electronic and paper certificates can be used; full transition expected later.
Implications:
Efficiency: Streamlines a historically paper-based process, reducing administrative burden.
Fraud risk: Electronic system may enhance verification and reduce fraud risks.
IT & compliance: Member States must build or upgrade systems to issue and validate these certificates.
5. Import VAT / Small Parcels Reform
New rules were adopted to simplify VAT collection on low-value imported goods.
Under the reform, non-EU suppliers or platformswill become liable for VAT when selling to EU consumers.
The idea is to encourage use of the Import One-Stop-Shop (IOSS) for distance sales: non-EU traders that do not use the IOSS would otherwise have to register in every Member State where they sell.
Effective date: These rules apply from 1 July 2028, per the directive.
Implications:
Revenue protection: By shifting tax liability to sellers (not consumers), Member States reduce risk of VAT loss on imports.
E-commerce impact: Platforms and non-EU sellers will need to adapt—register for IOSS or face more complex local VAT obligations.
Administrative burden: For non-EU sellers, adapting to IOSS and other VAT rules could be significant, but for EU states, it strengthens tax collection.
Broader Implications for Member States
Increased Transparency & Cooperation: Through DAC8 and DAC9, tax authorities across EU countries will gain much more information about corporate profits (via Pillar 2) and crypto-asset transactions. This can help in better enforcing tax rules, reducing evasion, and harmonizing tax enforcement.
Modernization of Tax Administration: The ViDA package pushes VAT systems into a digital future. Member States must build or upgrade digital infrastructure (e-invoicing platforms, real-time reporting, data-interchange systems).
Revenue Gains:
Higher VAT compliance from e-commerce (platforms, low-value imports) could increase VAT revenues.
Pillar 2 ensures that large multinationals pay a fair minimum rate, protecting local tax bases.
Crypto transparency (DAC8) could also increase tax receipts from asset gains or income.
Compliance Costs for Businesses:
MNEs will incur costs to consolidate tax reporting under DAC9.
Crypto service providers will need processes to collect and report user-level data.
Smaller businesses might struggle with adapting to real-time VAT reporting and OSS changes.
Fairer Competition:
E-commerce platforms (especially in the sharing economy) will be taxed more like traditional businesses (e.g., platforms remitting VAT).
Non-EU sellers are incentivized to formalize via IOSS, leveling the playing field.
Risk of Divergent Implementation: Even though directives set the EU-wide framework, Member States will have some discretion in how to implement (especially with digital systems), which could lead to uneven capacity and enforcement.