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On 24 June 2026, the European Commission adopted a tax simplification package comprising two legislative proposals aimed at reducing compliance burdens for businesses and strengthening competitiveness within the Internal Market. The package, a direct taxation Omnibus Directive and a recast of the Directive on Administrative Cooperation (DAC) is estimated to generate savings and reduce compliance costs for businesses by approximately EUR 7.9 billion.

The direct taxation Omnibus introduces a series of measures to modernise the EU's direct tax framework. Key elements include the abolition of withholding taxes on cross-border payments of dividends, interest and royalties between EU companies, the introduction of a common minimum standard for the tax treatment of R&D-related tangible assets, and a streamlining of the interaction between Controlled Foreign Company rules and the Pillar Two global minimum tax framework. The Omnibus also modernises interest limitation provisions under the Anti-Tax Avoidance Directive and expands the Tax Merger Directive to cover all forms of corporate reorganisations recognised under EU company law.

The DAC recast consolidates nine existing directives into a single legal instrument, improving clarity for businesses and tax administrations. Reporting obligations will be reduced for approximately 3,000 multinational enterprise groups already subject to Pillar Two rules, generating annual compliance cost savings of EUR 300 million. Reporting requirements are also removed for other companies on cross-border tax arrangements of limited added value, reducing overall reporting volumes by 35%. A further significant measure raises the reporting threshold for online sales of goods to support the circular economy, removing obligations for over 10 million sellers. Together, the DAC measures are expected to reduce compliance costs for EU businesses by over EUR 1 billion annually.

Both proposals will now be submitted to the European Parliament for consultation and to the Council for adoption. The package forms part of the Commission's broader simplification agenda, which targets a reduction in administrative burdens of at least 25% and 35% for SMEs by 2029.

Source: European Commission