Utrecht: The Commission’s Tax Omnibus, presented on 24 June 2026, is now moving through Council working groups and will test how far member states trust simplification in direct taxation. The package amends several corporate tax directives to cut complexity and administrative burdens, and it arrives alongside a recast of the Directive on Administrative Cooperation that merges eight separate directives into one text.

The most significant change touches the Anti-Tax-Avoidance Directive. The Tax Omnibus makes the 30 percent EBITDA cap on interest deductions mandatory, which closes the room that national options currently leave. It also introduces an EU-wide research and development allowance for capital expenditure and moves Controlled Foreign Company rules to a single entity-based approach.

The proposals also reach the older withholding tax directives. For the Interest and Royalty Directive, the Commission removes the minimum holding requirement so that relief applies whatever the level of participation, with safeguards against double non-taxation where a jurisdiction has no corporate income tax. For the Parent-Subsidiary Directive, participation thresholds and holding periods disappear, which widens tax-neutral dividend distributions across the Union. The Tax Merger Directive is aligned with recent company law developments on cross-border reorganisations.

Timing is deliberate and slow. Member states are asked to adopt the measures by 31 December 2028, most provisions apply from 1 January 2029, and some provisions apply from 2032 or 2037. A long runway helps national treasuries adjust their rules, but it also means the Tax Omnibus will not change the daily experience of companies for several years.

The companion recast has a faster clock. Several of its changes would apply from 1 January 2028 and others from 2030. It excludes arrangements involving entities subject to Pillar Two from mandatory disclosure, narrows the hallmarks and extends the reporting deadline from 30 to 90 days. Platform operators would report above a monetary threshold raised from €2,000 to €3,000, and a new digital tool would verify tax identification numbers.

Both texts need unanimity in the Council, which is the main political hurdle. The Irish Presidency aims to conclude the recast by December 2026, while work on the Tax Omnibus continues into 2027. Unanimity gives every capital a veto, and countries that rely on current deduction rules or on particular holding regimes may press for exceptions.

Businesses and tax advisers will watch whether the mandatory EBITDA cap survives, because it is the part of the Tax Omnibus most likely to change real tax bills. If member states keep the R&D allowance alongside the cap, the package could become a rare example of simplification that also supports investment in research.