The European Parliament's FISC Subcommittee on 14 July 2026 held a hearing on the Commission's Omnibus Proposal on Taxation, revealing a sharp divide between those who see the package as necessary simplification and those who warn it risks weakening tax safeguards. The proposal, presented as a competitiveness and simplification package, covers withholding taxes, CFC rules, hybrid mismatches, interest limitation, R&D expensing, and links with Pillar Two.
Benjamin Angel (DG TAXUD) defended the package as a fitness check to cut duplication and modernise direct taxation. However, several MEPs and civil-society speakers pushed back. Mireille Caruana (BusinessEurope) backed simplification but stressed it should not weaken the tax base, while Andrzej Schultz (Tax Justice Network) argued that complexity often reflects anti-avoidance schemes. Li Andersson (The Left) characterised the package as a return to deregulation favouring large non-EU multinationals.
On revenue protection, Matthias Ecke (S&D) pressed for clearer revenue estimates, while Angel argued that medium-term growth gains would support revenue. On Pillar Two as a substitute for CFC rules, Angel argued for reducing duplication, but Schultz and Ecke questioned whether Pillar Two achieves the same result. On withholding taxes, Fernando Navarrete Rojas (EPP) backed the direction but criticised the timeline (entry into force eight years after the directive). On interest deductibility, Angel proposed harmonising at 30% EBITDA with a €3 million de minimis and a defence-investment exception. Gerhard Huemer (SMEunited) welcomed SME carve-outs but noted the package does not transform SME activity without a harmonised tax base. Schultz proposed unitary taxation via BEFIT with formulary apportionment.
Consensus existed that tax complexity is real, but participants diverged on whether targeted simplification or tax-base harmonisation is the answer. Next steps: the debate remains open; Angel identified delayed withholding-tax reform as the clearest area for a stronger approach, constrained by unanimity. Affected stakeholders include EU and non-EU multinationals, SMEs, tax authorities, and Member State budgets.