Top-up taxes: information exchange within EU and other legislative developments
On 6 May 2025, Council Directive (EU) 2025/872 amending Directive 2011/16/EU on administrative cooperation in the field of taxation was published in the EU Official Journal. The directive creates the conditions for the EU-wide filing of single top-up tax information returns. Member states are obliged to transpose the directive into their legislations by 31 December 2025. The Czech government has already been working on the implementing law, which is about to be debated by the chamber of deputies.
DAC 9
We report on the forthcoming directive here Pillar Two: Exchange of information on information returns within EU (DAC 9).
The main tools for the centralised filing of information returns are:
- a uniform format of the global information return on allocated top-up tax, valid EU-wide (based on the OECD format) and
- a mandatory scope of information that financial administrations must provide to other member states where the group operates within the EU.
The EU-wide information return shall be filed centrally by the ultimate parent entity or another designated entity within the group, with the tax administration in its member state. Tax administrations of the other member states in which the group operates shall only be notified of the member state in which the information return was filed. Subsequently, they will also receive information concerning constituent entities in their jurisdiction (i.e. not the entire information return, just its predefined parts shall be shared).
The rules specified in the directive can only be applied to constituent entities within the EU. As the single format contains all essentials of the information return as approved at the OECD level, it should also be possible to apply the single-filing principle in relation to other countries. However, a prerequisite is that a qualified agreement on the exchange of information for Pillar Two purposes is concluded with that country (the directive is a multilateral agreement on the exchange of such information within the EU). The draft Czech implementation law already foresees this possibility.
The new directive does not prevent member states from requesting further information or filings concerning domestic top-up taxes. As the approved single information return already contains information for the determination of the domestic top-up tax, these requests should not be excessive.
The new directive should apply to filings for the first top-up tax reporting period started after 31 December 2023.
Czech implementation of DAC 9
The directive’s Czech implementation is being prepared as an amendment to the Act on International Cooperation in Tax Administration (the exchange of information about crypto assets has also been moved to the draft amendment). When defining the information return, the proposed amendment refers to the Act on Top-up Taxes. It can therefore be expected that the mandatory elements of the single information return format will be provided for in a separate decree on the essentials of submissions via prescribed forms for top-up tax.
Amendment to the Act on Top-up Taxes
So far, the chamber of deputies has not initiated the second reading of the amendment to the Act on Top-up Taxes, which includes an extension of the deadlines for certain submissions in this area. For comparison, we present the deadlines for first-time filing under current legislation and under the proposed amendment (calculated in months from the end of the first reporting period).
| Valid legislation | Amendment | |
|---|---|---|
| Information return on allocated top-up tax | 18 | 18 |
| Allocated top-up tax return | 22 | 22 |
| Information return on Czech top-up tax | 10 | 18 |
| Czech top-up tax return | 10 | 22 |
The prescribed forms for these submissions have not been published yet.