EU Tax Alert 216

Commission proposes Taxation Omnibus to simplify direct taxation and boost EU competitiveness

(Taxation Omnibus)

On 24 June 2026, the European Commission published the Taxation Omnibus package, proposing amendments to six key EU direct tax directives. The initiative aims to simplify EU tax rules, reduce administrative burdens and enhance EU competitiveness. The proposal updates the Parent-Subsidiary Directive, Interest and Royalties Directive, Tax Merger Directive, Anti-Tax Avoidance Directive, Dispute Resolution Mechanisms Directive and the FASTER Directive, aligning them more closely with recent international developments, including Pillar Two. The proposal is now before the Council. Member States would generally need to implement the changes by 31 December 2028, with most rules applying from 1 January 2029.

European Commission proposal for a recast of the Directive on Administrative Cooperation

(DAC Recast)

Also on 24 June 2026, the Commission proposed consolidating the Directive on Administrative Cooperation and its amendments (DAC1 to DAC9) into a single legal instrument. The DAC Recast aims to simplify, clarify and improve the framework for administrative cooperation in direct taxation, making the legislation more accessible and coherent while maintaining existing reporting and exchange-of-information mechanisms.

CJ judgment on VAT exemptions as State aid

(Schoger II)

In its judgment of 9 July 2026 in Case C‑360/25 (Schoger II), the Court of Justice ruled that an Austrian VAT exemption for services supplied between entities in the banking, insurance and pension fund sectors constituted unlawful State aid. The Court found that the exemption lacked a basis in the VAT Directive, granted a selective economic advantage and was capable of distorting competition and affecting intra-EU trade. Austria’s request to limit the temporal effects of the judgment was rejected.  

AG Opinion on the General Rule 2(a) and split-consignment imports

(Prestige Rijwielen)

On 10 June 2026, Advocate General Martín y Pérez de Nanclares delivered his Opinion in Case T‑529/25 (EPPO and Belgian State v Prestige Rijwielen and Others). The case concerned imports of electric bicycle parts through separate consignments allegedly intended to avoid customs, anti-dumping and countervailing duties. The AG concluded that General Rule 2(a) of the Combined Nomenclature generally applies only where all parts are presented to customs simultaneously, except where the legislation expressly provides otherwise. Consequently, electric bicycle parts imported through successive split consignments should not be classified as complete electric bicycles under Rule 2(a).