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Brussels Bets on Tax Simplification to Cut Europe’s Business Red Tape

Brussels: The European Commission has staked its latest deregulation push on tax simplification, adopting on 24 June 2026 a sweeping recast of the bloc’s tax cooperation rulebook that officials say will spare companies roughly 7.9 billion euro in compliance costs every year. The proposal folds a decade of overlapping reporting obligations into a single legal text.

The Commission presented the measure as the centrepiece of a wider Tax Simplification Package, tabling it alongside a Taxation Omnibus Directive. Together the two files target the paperwork that has piled up since 2011, when member states first agreed to swap tax information automatically to chase down cross-border evasion.

Over the following years the bloc bolted on layer after layer of rules, from mandatory disclosure of aggressive tax schemes to reporting duties for digital platforms and, most recently, crypto-asset service providers. Businesses complained that the additions duplicated one another and applied inconsistently across the 27 capitals.

The recast tackles those grievances directly. It streamlines the thresholds that decide when online platforms must report their sellers, trims duplicate notifications that multinational groups had to file twice under separate provisions, and clarifies the hallmarks that trigger disclosure of tax-planning arrangements. The Commission argues that clearer definitions will cut both cost and legal uncertainty.

Independent scrutiny inside the institution flagged concerns before the text went public. The Commission’s Regulatory Scrutiny Board issued a positive opinion with reservations in April 2026, pressing services to strengthen the evidence behind the projected savings. Officials revised the impact assessment before adoption.

Because taxation remains a jealously guarded national competence, the file now heads to the Council, where all 27 governments must agree unanimously before it can become law. That hurdle has stalled or diluted earlier tax initiatives, and several finance ministries are expected to scrutinise how the changes affect their own audit and revenue systems.

The Commission has published the underlying rules on its tax transparency portal, where the existing cooperation directives already sit. Supporters of tax simplification say consolidating them into one framework will make enforcement easier for national administrations too, not just cheaper for firms.

Business groups have broadly welcomed the direction while warning that the promised savings will only materialise if governments resist the temptation to add national carve-outs during negotiations. For the Commission, the package is a test of whether it can deliver the lighter regulatory touch it has promised without loosening the grip on tax avoidance it spent a decade building.