Dublin: Ireland’s Council presidency aims to adopt the recast of the Directive on Administrative Cooperation by the end of 2026, which makes the EU tax omnibus the main simplification file on finance ministers’ desks this autumn. The Commission published the Tax Simplification Omnibus and the DAC recast on 24 June 2026 to cut compliance burdens for taxpayers and tax authorities. Both proposals need unanimous backing from all 27 member states.
The EU tax omnibus amends five directives: the Anti-Tax Avoidance Directive, the Parent-Subsidiary Directive, the Interest and Royalties Directive, the Tax Merger Directive and the Tax Dispute Resolution Mechanisms Directive. Parliament receives the omnibus for consultation, while national officials negotiate in Council working groups, where a Council document dated 25 June 2026 opened the file.
In the EU tax omnibus, the anti-avoidance changes carry the most money. The interest limitation stays at 30% of tax-adjusted EBITDA, but a mandatory €3 million threshold applies and no cap bites in years when EBITDA falls by 50% or more. Loans from third parties escape the rule if the borrower uses the funds for its own activities, and defence companies gain a temporary exclusion.
Research spending gets a boost. Companies could deduct qualifying R&D costs immediately or spread them over four later periods, with a claw-back if the money does not go to R&D within three years. Controlled foreign company rules would offer targeted exemptions to Pillar Two groups and small firms, and the imported hybrid mismatch rule would disappear.
Withholding tax rules also loosen. The EU tax omnibus removes the minimum holding requirement and holding period, ends prior authorisation for exemptions and adds a fast-track refund when eligibility is unclear. An anti-abuse rule still requires tax, or denies a deduction, for payments to recipients in zero-tax jurisdictions.
The DAC recast folds DAC1 to DAC9 into one instrument, exempts Pillar Two multinationals from DAC6 reporting and drops some hallmarks. Dispute resolution improves too, because taxpayers learn without delay when authorities conclude that no mutual agreement is possible, according to a Baker McKenzie summary.
Business groups have mixed expectations. Large multinationals welcome fewer reporting duties and clearer interest rules, while smaller exporters care most about faster withholding tax refunds. The EU tax omnibus also touches mergers by extending tax-neutral cross-border conversions to all EU company forms, a change that could simplify restructuring across borders.
Unanimity is the hurdle. Budget implications may slow adoption, and member states that value anti-abuse safeguards could resist some relief. The next test for the EU tax omnibus is whether the Irish presidency turns working-group progress into agreed texts before December, as the Commission taxation pages track the file.
