In June 2026, the European Commission presented a new tax simplification package aimed at making the European Union’s direct tax framework easier to navigate for businesses operating across borders. The package consists of two legislative proposals: the Taxation Omnibus and a recast of the Directive on Administrative Cooperation (DAC).
According to the Commission, the proposals are intended to modernise EU tax rules while preserving existing safeguards against tax fraud, tax evasion and tax avoidance. If adopted, the measures are expected to generate annual savings of around €8 billion for businesses across the EU, including approximately €3.3 billion in reduced administrative costs.
Why the package was introduced
Over the past decade, the EU has introduced a series of tax measures to address challenges such as globalisation, digitalisation, aggressive tax planning and the need for greater coordination within the Single Market. While these initiatives have strengthened the EU’s tax framework, they have also increased the complexity of tax compliance for companies operating in multiple Member States.
The Commission’s latest proposals seek to simplify existing legislation, improve legal certainty and reduce unnecessary compliance requirements, while maintaining effective tax oversight.
Key measures in the Taxation Omnibus
The Taxation Omnibus focuses on simplifying several areas of direct taxation.
One of the most significant proposals is the introduction of an exemption from withholding tax on cross-border payments of dividends, interest and royalties between companies established within the EU. By reducing upfront administrative procedures and streamlining refund processes, the Commission expects the measure to facilitate investment and financing across the Single Market. It estimates annual savings and benefits of approximately €5.3 billion for taxpayers.
The proposal also aims to make business financing more straightforward by removing certain restrictions affecting genuine third-party and market-based financing arrangements. In addition, it simplifies the interest limitation rules under the Anti-Tax Avoidance Directive (ATAD) by making the de minimis threshold mandatory and removing several implementation options. These changes are expected to reduce compliance and administrative costs by more than €500 million each year.
Another element of the Omnibus addresses overlapping rules between the Controlled Foreign Company (CFC) regime and the global minimum tax framework under Pillar Two. By removing duplication between these regimes, the Commission estimates businesses could save around €160 million annually in compliance costs.
Simplifying administrative cooperation
The second proposal recasts the Directive on Administrative Cooperation (DAC), consolidating the original directive and its eight amendments into a single legislative text. The objective is to improve the clarity, consistency and accessibility of the legislation for both tax administrations and taxpayers.
Among the proposed changes is the removal of certain reporting obligations for multinational enterprise (MNE) groups already subject to the global minimum 15% tax under Pillar Two. The Commission estimates this measure could reduce compliance costs by approximately €300 million per year.
The proposal also removes reporting requirements for certain cross-border tax arrangements considered to provide limited additional value to tax authorities. According to the Commission, this would reduce reporting volumes by around 35%, resulting in annual savings of approximately €40 million.
To support the circular economy, the proposal increases the reporting threshold for online sales of goods. As a result, more than 10 million private sellers, particularly individuals selling second-hand goods through digital platforms, would no longer be subject to reporting obligations. The Commission estimates this would reduce compliance costs for digital platforms by €678 million annually.
In addition, the recast introduces a new verification tool for taxpayer identification numbers (TINs), intended to help tax authorities identify taxpayers more efficiently and improve the quality of information exchanged between Member States.
What happens next?
The proposals will now be submitted to the European Parliament for consultation before being considered by the Council of the European Union, which must adopt the legislation before it can enter into force.
The package forms part of the Commission’s broader simplification agenda, which seeks to reduce administrative burdens by at least 25% overall and 35% for small and medium-sized enterprises (SMEs) by 2029. The Commission has stated that simplification is intended not only to reduce paperwork but also to create a regulatory environment that is clearer, more proportionate and easier for businesses to comply with, while maintaining the EU’s existing standards for tax transparency and enforcement.
References
European Commission . (2026, June 24). Tax simplification package to streamline compliance and enhance competitiveness of the Single Market. Retrieved from European Commission – Press Corner : https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1439
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