What are the measures in the European Commission´s Tax Simplification Package?

Here is the European Commission´s Tax Simplification Package - Portugal Business News

Financial News Europe - Here is the European Commission´s Tax Simplification Package, The Competitiveness Compass, including all the main measures that are set to be implemented by 2028, according to an announcement dated June 24, 2026:

If the European Commission Tax Simplification Package is adopted and implemented as set out below, the measures are expected to reduce compliance and related financial costs by about 6.6 billion euros per year, out of which 2 billion euros per year will be saved in recurrent costs related to administrative burdens.

Most of the EU Tax Simplification measures are frontloaded and should be implemented by 2028. The rest of the measures, including those that aim to improve the effective functioning of the Directive, should be implemented by 2030.

What is the European Union´s Tax Simplification Package?

The European Union´s Tax Simplification Package, The Competitiveness Compass, was built on the Draghi report to set a clear vision for a more prosperous and competitive EU economy since simple Tax Regulations are key to a more competitive and investment-friendly Europe.

The European Union´s Tax Simplification Package aims to reduce administrative burdens in EU countries by at least 25% for the taxation of companies and by at least 35% for SMEs. This should translate to at least 37.5 billion euros in annual cost savings for companies in the EU by 2029.

What are the main measures in The European Union´s Tax Simplification Package?

Here are the main measures in the EU Tax Simplification Package:

1 - Creating a Direct Taxation Omnibus for a more investment-friendly tax framework:

The European Union´s Tax Simplification Package introduces an exemption from withholding tax on all cross-border payments of dividends, interest, and royalties between companies in the EU.

By removing upfront procedural requirements and simplifying refund processes, the measure will facilitate financing, encourage investment, and enhance competitiveness. This measure alone should bring EU taxpayers savings and benefits of around €5.3 billion annually.

2 - Simplifying the interest limitation rule in the Anti-Tax Avoidance Directive:

The European Union´s Tax Simplification Package also simplifies the interest limitation rule in the Anti-Tax Avoidance Directive (ATAD) by eliminating implementation options and making the de minimis threshold mandatory. These changes will bring about compliance and administrative reductions amounting to over €500 million per year.

3 - Removing overlapping provisions between the Controlled Foreign Company (CFC) rules and the global minimum tax

The European Union´s Tax Simplification Package removes overlapping provisions between the Controlled Foreign Company (CFC) rules and the global minimum tax (Pillar Two), reducing unnecessary complexities and overlaps. This measure should save businesses approximately €160 million in compliance costs annually.

4 - Introducing a single-model approach for the Controlled Foreign Company (CFC) Framework

The European Union´s Tax Simplification Package introduces a single-model approach for the Controlled Foreign Company (CFC) Framework that will simplify its application across the EU, ensuring greater clarity and uniformity, and reducing compliance costs by about €45 million per year.

5 - Introducing a common minimum standard for the tax treatment of investment in R&D

The European Union´s Tax Simplification Package introduces a common minimum standard for the tax treatment of investment in R&D related tangible assets across the EU, making the Union a more attractive location for investment in research and innovation. This is estimated to grow the EU´s GDP by around 0.2% per year, providing a boost to the economy.

6 - Removing reporting obligations for Multinational Enterprises (MNEs) subject to the minimum 15% tax rate

The European Union´s Tax Simplification Package removes reporting obligations for 3,000 Multinational Enterprises (MNEs) subject to the minimum 15% tax rate under Pillar 2 rules, generating compliance cost savings of around €300 million. It also eliminates reporting requirements for all other EU businesses for certain cross-border tax arrangements that provide limited added value for tax administrations, reducing reporting volumes by 35% and saving €40 million annually.

7 - Increasing the reporting threshold for the online sales of goods

The European Union´s Tax Simplification Package increases the reporting threshold for the online sales of goods, removing reporting obligations on over 10 million private sellers, particularly those selling second-hand goods. This measure delivers compliance cost savings of €678 million for digital platforms.

8 - Introducing a single notification requirement for country-by-country reporting by MNEs

The European Union´s Tax Simplification Package streamlines the notification process for MNEs by introducing a single notification requirement for country-by-country reporting and the central filing of top-up tax information returns. This measure will save over €260 million annually.

9 - Introducing a new verification tool for taxpayer identification numbers

The European Union´s Tax Simplification Package introduces a new verification tool for taxpayer identification numbers, ensuring that tax administrations can efficiently and effectively identify all reported taxpayers.

10 - Enhancing the existing Tax framework for the automatic exchange of information on certain categories of income and capital

The European Union´s Tax Simplification Package enhances the existing framework for the automatic exchange of information on certain categories of income and capital by requiring that all information available on all categories is exchanged while, at the same time, providing a legal basis for Tax Authorities to access this information.

These measures will significantly reduce compliance costs for EU businesses by more than €1.3 billion annually while ensuring that tax administrations remain fully equipped to safeguard their tax revenues and combat tax fraud, evasion, and avoidance.