{"id":9823,"date":"2026-11-04T14:10:47","date_gmt":"2026-11-04T14:10:47","guid":{"rendered":"https:\/\/wlp-law.com\/europese-commissie-presenteert-pakket-voor-fiscale-vereenvoudiging-en-sterkere-concurrentiepositie\/"},"modified":"2026-11-04T14:34:44","modified_gmt":"2026-11-04T14:34:44","slug":"europese-commissie-presenteert-pakket-voor-fiscale-vereenvoudiging-en-sterkere-concurrentiepositie","status":"publish","type":"post","link":"https:\/\/wlp-law.com\/en\/europese-commissie-presenteert-pakket-voor-fiscale-vereenvoudiging-en-sterkere-concurrentiepositie\/","title":{"rendered":"European Commission proposes major tax reforms to simplify compliance and strengthen EU competitiveness"},"content":{"rendered":"\t\t
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European Commission proposes major tax reforms to simplify compliance and strengthen EU competitiveness<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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On 24 June 2026, the European Commission (EC) published proposals for simplifying various European tax rules. The package includes two legislative proposals: the Direct Taxation Omnibus and a revision of the Directive on Administrative Cooperation (DAC), also referred to as the DAC Recast.<\/p>\n

With these proposals, the EC aims to simplify European rules in the field of direct taxation, reduce the administrative burden for companies and strengthen the competitiveness of the internal market. The European framework for direct taxation must therefore be modernised and made more efficient and also better adapted to the current economic conditions.<\/p>\n

The package is in line with the EC’s broader commitment to reduce the regulatory burden on companies. By better aligning tax regulations and removing unnecessary obligations, the EC aims to simplify implementation for Member States and allow companies to devote more resources to their business activities and future development.<\/p>\n

The package is expected to save companies across the EU approximately \u20ac 7.9 billion in compliance costs.<\/p>\n

Key elements of the proposals<\/strong><\/p>\n

The direct taxation Omnibus and the DAC Recast are mainly aimed at simplifying, harmonising and reducing administrative burdens. The main proposed changes are:<\/p>\n

    \n
  • Further harmonisation of the European interest deduction limitation;<\/li>\n
  • Establishing a European minimum facility for R&D-related costs;<\/li>\n
  • Simplification of Controlled Foreign Company (CFC) rules and regulations for imported hybrid mismatches;<\/li>\n
  • Extension of exemptions for dividend, interest and royalty payments;<\/li>\n
  • Simplification of cross-border reorganisations and tax disputes; and<\/li>\n
  • Reduce and streamline reporting requirements under DAC 1 to DAC 9 by replacing these existing Directives with one consolidated Directive.<\/li>\n<\/ul>\n

    EU direct taxation Omnibus<\/strong><\/p>\n

    ATAD I and II
    \n<\/em>An important part of the package concerns the proposed amendments to the Anti-Tax Avoidance Directives I and II (ATAD). These changes include the interest deduction limitation, R&D expenditure, CFC rules and hybrid mismatches.<\/p>\n

    Interest deduction limitation
    \n<\/span>It is proposed to further harmonise the application of the earnings stripping measure within the EU. This is based on a maximum interest deduction of 30% of the taxable EBITDA and a mandatory threshold of \u20ac 3 million.<\/p>\n

    For the Netherlands, this adjustment would deviate from the current earnings stripping measure, which now provides for a lower percentage (24.5%) and a lower threshold (\u20ac 1 million). Under the proposal, Member States will no longer have the option to apply such stricter percentages or lower thresholds.<\/p>\n

    In addition, it is proposed that the interest deduction limitation should not be applied in years in which the EBITDA has decreased by at least 50%. Interest on loans from independent third parties could also be excluded from the restriction, provided that the financing is used for the taxpayer’s own activities and is not lent on to a group company. A temporary exception is provided for the defence sector.<\/p>\n

    Furthermore, some parts that are still optional under the current ATAD provisions will be made mandatory. These include a group escape and a non-deductible interest carry-forward scheme.<\/p>\n

    In the context of the Omnibus proposal, the Dutch government has postponed the decision on a possible tightening of the earnings stripping measure for excessive financing arrangements in real estate that is leased to third parties.<\/p>\n

    R&D deduction
    \n<\/span>The proposal includes an EU-wide minimum facility for qualifying expenditure for research and development (R&D).<\/p>\n

    The scheme covers capital expenditure for e.g. installations, machinery and other tangible fixed assets that are used directly for R&D or to support R&D activities. These expenses could be deducted directly in the year in which they are incurred or over a maximum of four consecutive tax periods.<\/p>\n

    A claw-back scheme will be linked to the facility. If the assets in question are not used for R&D purposes for at least three years, are disposed of, scrapped or are no longer owned by the taxpayer, the tax advantage can under certain circumstances be reversed.<\/p>\n

    In addition, it is proposed to adjust the calculation of the fiscal EBITDA for the application of the interest deduction limitation. This should prevent the R&D deduction from reducing EBITDA and thus indirectly leading to less interest deduction.<\/p>\n

    CFC rules
    \n<\/span>For groups within the scope of Pillar Two, meaning groups with a consolidated annual revenue of at least \u20ac 750 million, and for small to medium-sized enterprises, targeted exceptions to the CFC rules are proposed.<\/p>\n

    For Pillar Two groups, this should prevent the same low-taxed profit from being taxed under both the CFC rules and the Income Inclusion Rule (IIR) and avoid double compliance obligations. The exemption does not apply if Pillar Two does not guarantee sufficient effective taxation.<\/p>\n

    It is also proposed to make the so-called ‘Model A’ mandatory. Under this model, certain categories of passive income of a low-taxed foreign entity are allocated to the parent company. The possibility to apply \u2018Model B\u2019, which targets non-genuine CFC arrangements, will lapse. As a consequence, the Netherlands will no longer apply Model B.<\/p>\n

    Mandatory exceptions are also introduced for entities and permanent establishments with only a limited level of passive income, as the risks of tax avoidance are considered low in those cases. In addition, the possibility for Member States to apply different national CFC rules will be limited.<\/p>\n

    Hybrid mismatches
    \n<\/span>The EC has also proposed to remove the rules for imported hybrid mismatches. These rules may limit the deduction of payments by an EU-based company when they finance a hybrid mismatch elsewhere within a group. The EC considers these provisions too complex and therefore, by removing them, it aims to simplify the regulations and make them more proportionate.<\/p>\n

    PSD and IRD
    \n<\/em>The Omnibus proposal contains adjustments in relation to withholding taxes. For example, the EC wants to simplify the application of exemptions for cross-border dividend, interest and royalty payments.<\/p>\n

    To this end, it is proposed to expand access to the exemptions under the Parent-subsidiary Directive (PSD) and the Interest and Royalties Directive (IRD). For the PSD, the minimum shareholding percentage of 10% will be removed. As a result, in principle, all qualifying dividends and other profit distributions between EU companies could be subject to the exemption from withholding tax and the avoidance of double taxation. The scope of the Directive is also expanded to include pension institutions, regardless of their legal form.<\/p>\n

    Under the IRD, it is proposed to remove the minimum holding requirement of 25% from the definition of an affiliated company. This would allow interest and royalty payments between EU companies to benefit from the withholding tax exemption, regardless of the size of the shareholding. The possibility for Member States to require a minimum holding period of two years will also be abolished.<\/p>\n

    In addition, Member States may no longer require prior authorisation or a separate administrative procedure to determine whether the conditions for the exemption are met before payment. In principle, the taxpayer assesses whether the exemption can be applied. The tax authorities can check this afterwards.<\/p>\n

    The Omnibus proposal also clarifies that the IRD applies to payments attributable to the activities of a permanent establishment, regardless of whether these payments are tax-deductible in the Member State where that permanent establishment is located.<\/p>\n

    If, at the time of payment, it cannot be established with sufficient certainty that entitlement to the exemption exists, reimbursement must be made within a reasonable period of time by means of the national procedure. The accelerated procedures under the Faster and Safer Relief of Excess Withholding Taxes (FASTER) Directive will also be available for income from listed securities that fall under the exemptions of the PSD or the IRD.<\/p>\n

    A measure against double non-taxation is also proposed for interest and royalty payments. The source state must levy withholding tax or refuse the deduction of the payment if the recipient is established<\/p>\n

    in a non-EU jurisdiction where corporate tax is not levied or a 0% rate applies. In principle, this measure does not apply if the recipient is covered by Pillar Two, except in certain situations where the group is established in a country with a qualifying ‘Side-by-Side’ regime.<\/p>\n

    Under the PSD, the possibility of excluding costs associated with a participation from deduction is limited to shareholdings of at least 10%. It is further clarified that Member States may continue to apply national anti-abuse measures against income or wealth tax avoidance through holding companies.<\/p>\n

    Merger Directive
    \n<\/em>The Omnibus proposal contains changes for the tax treatment of cross-border reorganisations. The proposed amendments bring the scope and definitions of the Merger Directive more in line with the previously introduced Mobility Directive.<\/p>\n

    The proposal explicitly brings simplified mergers and divisions by carve-out within the scope of the Merger Directive. In addition, the possibility of a tax-neutral restructuring is extended to cross-border conversions and transfers of the registered office of EU companies.<\/p>\n

    The list of legal forms in the Annex to the Directive is also updated and may be adapted in the future by means of delegated acts. The amendments should lead to a better alignment of the corporate law and tax framework for cross-border reorganisations.<\/p>\n

    DRM Directive
    \n<\/em>Under the Omnibus proposal, the Directive on Tax Dispute Resolution Mechanisms in the EU (DRM Directive) will be amended to make tax disputes between Member States faster and easier. For example, taxpayers must be informed immediately if no agreement can be reached, thus allowing earlier access to arbitration.<\/p>\n

    In addition, the complaint stage of the procedure is clarified. In the case of several taxpayers involved, a single joint complaint may be lodged and a period of 30 days applies for submission to the relevant competent authorities. Disputes about the admissibility of a complaint can now also be submitted to an arbitration committee.<\/p>\n

    Also, other dispute proceedings will be suspended once a complaint under the DRM Directive has been filed and will be terminated when all competent authorities have accepted the complaint.<\/p>\n

    DAC Recast
    \n<\/strong>In addition to the substantive tax Directives, the European Framework for Administrative Cooperation is also being revised.<\/p>\n

    With the DAC Recast, the EC proposes to merge DAC1 to DAC9 into a single Directive. The proposal aims to make the existing framework clearer, reduce administrative burdens and improve the quality and comparability of the data exchanged.<\/p>\n

    The most important substantive changes relate to DAC 4, DAC6, DAC7, DAC9 and the verification of tax identification numbers.<\/p>\n

    DAC6
    \n<\/em>For DAC6, it is proposed to extend the reporting period for reportable cross-border arrangements from 30 to 90 days. This period only starts once the first step in the execution of the arrangement has been taken. This will make the reporting more focused on arrangements that are actually implemented.<\/p>\n

    Multinational groups covered by Pillar Two will in principle be exempted from DAC6 reporting. The idea behind this is that these groups are already extensively monitored and that the minimum tax of 15% reduces some of the risks of aggressive tax planning. However, for certain situations where no effective minimum taxation is ensured, DAC6 will continue to apply.<\/p>\n

    In addition, a number of Hallmarks are deleted which, according to the EC, provide little useful information, while they do lead to considerable reporting burdens. The scope of the legal professional privilege is also clarified, as is the requirement to report the involvement of third countries where relevant.<\/p>\n

    DAC7
    \n<\/em>For digital platforms, it is proposed to further limit reporting on occasional sellers. The limit of 30 transactions will be abolished, while the turnover threshold will be raised from \u20ac 2,000 to \u20ac 3,000. In addition, the definition of platform operator may be extended to certain intermediaries.<\/p>\n

    Furthermore, a possible exception is provided for smaller platform operators that remain below a turnover threshold that has yet to be determined.<\/p>\n

    DAC4 and DAC9
    \n<\/em>The DAC Recast proposes that reports should increasingly be submitted at group level. Multinational groups will have the opportunity to submit one report per group for both Country-by-Country Reporting (CbCR) under DAC 4 and the central Pillar Two information reporting under DAC 9. A joint format is being developed for this purpose. When the notification is submitted to a tax authority, it will then be exchanged with all relevant tax authorities within three months of the expiration of the submission deadline.<\/p>\n

    Tax identification numbers
    \n<\/em>The EC wants to develop a digital facility with which tax identification numbers, so-called Taxpayer Identification Numbers (TINs), can be checked automatically. Their use will be mandatory for tax authorities and optional for reporting companies.<\/p>\n

    Follow-up steps and entry into force
    \n<\/strong>Both proposals are currently being submitted to the European Parliament for consultation and to the Council of the European Union for adoption. The adoption of the Directive requires the unanimous consent of the Council under Article 115 TFEU, while the European Parliament only has an advisory role in this regard. The content of the final Directive will therefore be determined by the outcome of the negotiations between the Member States and may still change in important respects compared to the EC’s original proposal. The aim is to reach an agreement by the fourth quarter of 2027 at the latest.<\/p>\n

    According to the proposed Directive, Member States must implement the direct taxation Omnibus by 31 December 2028. The provisions would then apply from 1 January 2029. However, some important provisions will be subject to later application dates.<\/p>\n

    For example, the adjusted threshold of \u20ac 3 million under ATAD’s interest deduction limitation would apply only from 1 January 2032. In addition, various amendments to the PSD and the IRD would only take effect from 1 January 2037. These include the removal of the minimum holding requirement and holding period, the extension of the exemption to payments to pension funds, simplified refund procedures and a protection clause for certain payments to low-tax non-EU jurisdictions.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

    On 24 June 2026, the European Commission (EC) published proposals for simplifying various European tax rules.<\/p>\n","protected":false},"author":2,"featured_media":5868,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-9823","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-geen-onderdeel-van-een-categorie"],"_links":{"self":[{"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/posts\/9823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/comments?post=9823"}],"version-history":[{"count":4,"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/posts\/9823\/revisions"}],"predecessor-version":[{"id":9830,"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/posts\/9823\/revisions\/9830"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/media\/5868"}],"wp:attachment":[{"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/media?parent=9823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/categories?post=9823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wlp-law.com\/en\/wp-json\/wp\/v2\/tags?post=9823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}