On 25 June 2026, the European Commission published a proposal for a Tax Omnibus directive aimed at simplifying six existing EU direct tax directives to reduce compliance burdens and boost cross-border business activity. The proposal, presented as a Commission Staff Working Document accompanying a draft Council Directive, targets directives on withholding taxes, cross-border mergers, parent-subsidiary taxation, anti-tax avoidance, tax dispute resolution, and a 2025 directive. The preferred 'Comprehensive Omnibus' option is estimated to cut recurrent administrative burdens by roughly EUR 2 billion per year and total compliance and financial costs by about EUR 6.6 billion annually, with long-run GDP increases of 0.04% from withholding tax exemption and 0.2% from immediate R&D expensing.
The proposal responds to fragmented national tax systems, outdated EU rules, and inconsistent application that create disproportionate compliance costs, legal uncertainty, and barriers to cross-border investment. The Commission aims to eliminate unnecessary burdens, introduce clearer rules, improve consistency, and reduce tax obstacles. Specific SME measures include a carve-out from Controlled Foreign Company (CFC) rules, saving an estimated EUR 90 million per year, and a de facto carve-out from the interest limitation rule, saving at least EUR 69 million annually.
EU businesses and tax professionals back the simplification, and EU Member States unanimously welcomed the initiative in Council Conclusions from March 2025. The Commission expects no significant costs for businesses or tax administrations, with limited or neutral impacts on national budgets. A first evaluation is planned no earlier than five years after the new rules apply.
The proposal now moves to the Council for adoption, where Member States will negotiate the final text. The European Parliament will be consulted. If adopted, the directive would streamline tax compliance for companies operating across borders, particularly benefiting SMEs, while maintaining anti-abuse safeguards.