EU Tax Simplification package unveiled: time to look ahead

19 June 2026

Tags Tax

Today the European Commission unveiled the EU Tax Simplification Package, initiated by the European Commission in 2024. The legislative package aims to streamline key areas of EU direct tax law and reduce fragmentation across the EU Member States. With this package the European Commission responded to growing concerns that overlapping rules, reporting obligations and overall complexity is undermining EU competitiveness.

Tax Omnibus: simplifying EU direct tax directives

The European Commission has published the Tax Omnibus proposal (nr. ?), a single Directive amending six existing EU direct tax instruments at once. The initiative forms part of the EC broader competitiveness agenda responding to the Draghi Report's call to reduce the cost of doing business in Europe and boost EU competitiveness.

The Omnibus covers the Interest and Royalties Directive, the Parent Subsidiary Directive, the Tax Merger Directive, the Anti-Tax Avoidance Directive, including significant changes to the interest limitation rules, the Controlled Foreign Company (CFC) rules and the General Anti-Abuse Rule (GAAR), the Dispute Resolution Mechanisms Directive and the FASTER Directive. Below we provided for an overview of the main changes and indicate what businesses may want to monitor as the legislative process continues.

Reducing compliance complexity

ATAD and Pillar Two: removing the overlap

Anti-Tax Avoidance and Pillar Two

Renteaftrekbeperking: één uniforme standaard

Interest limitation rule: a uniform standard

O&O-uitgaven: een gemeenschappelijk EU-kader

R&D expenditure: a common EU framework

Afstemming fiscale en ondernemingsregels

Other measures

The DAC recast: simplifying tax transparency

Since its introduction in 2011, the Directive on Administrative Cooperation (2011/16/EU) has been essential for tax transparency and exchange of information within the EU. With multiple amendments (DAC1 to DAC9), the framework has expanded considerably, introducing new reporting obligations and exchange mechanisms designed to combat tax evasion and improve cooperation between tax authorities.

While these measures have strengthened transparency, they have also created a complex and fragmented system. The European Commission published a comprehensive DAC recast (nr.?), which aims to consolidate the existing framework into a single legal instrument, simplify reporting obligations, and improve the usability of tax data across Member States.