On 24 June 2026, European Commissioner for Taxation Wopke Hoekstra presented a tax simplification package aimed at reducing administrative burdens and improving the EU's business climate. The package, which includes a Direct Taxation Omnibus and a recast of the Directive on Administrative Cooperation (DAC), is projected to save an estimated EUR 8 billion annually for companies operating across the Single Market. Hoekstra emphasised that the proposals are designed to make taxation simpler, faster, and smarter, while maintaining safeguards against tax avoidance and evasion.
The Direct Taxation Omnibus modernises the EU's direct tax framework by removing withholding tax barriers on cross-border payments of interest, royalties, and dividends between EU companies. For example, a company paying royalties to an entity in another member state will be exempt from withholding tax, eliminating lengthy refund procedures. The proposal also simplifies the interest limitation rule, allowing companies to deduct the full amount of interest on loans for equipment, staff, or innovation, with adjusted thresholds to avoid unnecessary restrictions for smaller firms. Additionally, the omnibus aligns EU rules with the global minimum tax (Pillar 2) by relieving in-scope multinationals from applying low-taxed controlled foreign company rules, as both achieve similar outcomes.
The recast of the DAC consolidates nine existing legal texts into a single framework, aiming to clarify and improve administrative cooperation and automatic exchange of information among tax authorities. It removes the obligation to report cross-border tax arrangements of limited value for tax administrations and increases the reporting threshold for online sales of goods. For instance, platforms will now only need to report sellers' information when annual sales exceed EUR 3,000, up from the previous threshold of 30 transactions, benefiting small sellers and supporting the circular economy. The recast also enhances information sharing and taxpayer identification.
Hoekstra framed the package as a clear signal of the Commission's commitment to competitiveness, making it easier for businesses to grow and invest in the EU. He noted that this is an important step but not the last, indicating further simplification efforts to come. The package, which was presented alongside broader simplification agenda items discussed by other Commissioners, now awaits consideration by the European Parliament and the Council.
EU businesses stand to benefit from reduced compliance costs and simpler cross-border tax procedures, potentially boosting investment and growth. National tax authorities may face initial adaptation costs but gain more efficient cooperation tools and better-targeted information. Small online sellers and the circular economy gain from higher reporting thresholds, reducing administrative burdens. Tax justice advocates may raise concerns that simplifications could create loopholes, though the Commission insists safeguards against avoidance remain strong.