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August 9, 2026

Newsletter

The European Post

Policy • Diplomacy • Strategic Insight

LATEST
New EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before AntalyaNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before Antalya

Tax Rulebook Shrinks as Commission Chases 8bn in Savings

Rúnar Guðmundsson
Regulatory Monitor, Taxation

Milan: For the finance directors of Europe’s larger companies, the paperwork of tax compliance has long felt like a tax in its own right. On 24 June the European Commission moved to lighten it, adopting a simplification package built around two legislative proposals: a direct taxation Omnibus and a full recast of the 2011 Directive on Administrative Cooperation, the framework better known by its shorthand, DAC.

The headline number is deliberately eye-catching. The Commission estimates the package will cut business compliance costs by roughly 7.9 billion euro, chiefly by pruning reporting duties that administrations have quietly concluded add little. Around 3,000 multinational groups already covered by the 15 percent global minimum tax under the Pillar Two rules would be released from parallel reporting on cross-border arrangements, a change worth some 300 million euro a year. Smaller firms would see certain low-value reporting obligations disappear altogether, trimming overall reporting volumes by about 35 percent.

The logic is that the Union has built successive layers of transparency over a decade, and that some now overlap. Where a company’s tax position is already visible through the minimum-tax framework, requiring it to file the same information again through the older anti-avoidance channel produces cost without insight. The recast also extends the uses of administrative cooperation: since January this year the DAC machinery can support anti-money-laundering work and the enforcement of sanctions, and the redraft consolidates those functions.

Not everyone welcomes the trimming. Tax-justice campaigners warn that visibility, once surrendered, is hard to recover, and that the mandatory disclosure regime for cross-border schemes was one of the few tools giving authorities early sight of aggressive planning. The Commission’s answer is that protection against fraud, avoidance and evasion is preserved, and that the exemptions target duplication rather than substance. Which reading is correct will depend on how tax administrations use the data they still receive.

For businesses, the practical questions are timing and unanimity. Direct-tax files require the agreement of all member states in the Council, and several capitals guard reporting rules jealously. The proposals now pass to finance ministers and the European Parliament, and a text that looks generous to industry in July can be narrowed considerably before adoption.

What is clear is the direction of travel. After years in which the Union’s instinct was to add reporting requirements in pursuit of ever-greater transparency, the emphasis has shifted toward competitiveness and the cost of compliance, a theme running through the Commission’s economic agenda this year. The simplification package is a test of whether that rhetoric can survive contact with twenty-seven treasuries, each with its own view of how much sunlight the tax system needs.

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