Tax Omnibus: Simplifying tax rules to support the EU single market

The main elements of the proposal include in particular:

• the gradual elimination of withholding taxes on cross‑border dividends, interest and royalty payments made within the EU between eligible companies, and a move towards a self‑assessment system,
• the simplification and alignment of anti‑avoidance rules (e.g. CFC rules, limitation of interest deductibility) and the reduction of overlaps with Pillar 2 rules,
• efforts to harmonise tax incentives, especially in the area of research and development, so that rules for investors in the EU are clearer and more attractive,
• adjustments in the area of tax transparency and the exchange of information between the tax authorities of the Member States.

As this concerns the area of direct taxation, the proposals must be unanimously approved by all Member States in the Council of the EU. The debate therefore naturally also focuses on the question of potential short‑term revenue losses versus long‑term benefits in the form of increased attractiveness of the EU for investment.

If the package is adopted in a sufficiently ambitious form, it could represent a significant step towards a simpler, more predictable and more competitive tax environment in the European Union.