Why now?

On 24 June 2026, the European Commission published an ambitious tax simplification package comprising two proposals: the Taxation Omnibus and a recast of the Directive on Administrative Cooperation (DAC Recast).

Over the past decades, the EU has introduced numerous direct tax directives to facilitate cross-border business and combat tax avoidance. Over time, the growing number of EU tax rules and differences in implementation across EU Member States have increased complexity, compliance burdens and legal uncertainty for multinational groups operating across the EU. Together, the Taxation Omnibus and DAC Recast aim to simplify EU tax rules, reduce administrative burdens and strengthen EU competitiveness.

What is changing?

The Taxation Omnibus proposes fundamental changes to six key EU directives, reflecting the view that certain anti‑avoidance rules have become overlapping or disproportionate. Key measures include:

  • Removing minimum participation thresholds for intra-EU withholding tax exemptions on dividends, interest and royalties;
  • Further harmonising earnings stripping rules across EU Member States;
  • Streamlining and narrowing the CFC regime to reduce overlap with Pillar Two;
  • Extending tax-neutral treatment to additional cross-border reorganisations; and
  • Streamlining tax dispute resolution procedures.

The Commission also recognises that fragmented domestic R&D tax incentives could put the EU at a competitive disadvantage and proposes a minimum EU-wide R&D allowance providing for an immediate deduction of qualifying expenditure on tangible R&D assets, or, alternatively, a deduction spread over the subsequent four tax periods.

The DAC Recast consolidates the DAC framework into a single legal text and proposes targeted changes to Country-by-Country Reporting, Pillar Two Reporting, the EU Mandatory Disclosure Rules and transparency rules for digital platforms.

What does this mean for US multinational groups?

The package signals a shift towards simpler and more coordinated EU tax rules. If adopted, US-parented groups could benefit from simpler relief for intra-EU payments, targeted interest and R&D improvements and less duplicative reporting. As both proposals require unanimous approval from the EU Member States, the content of the proposals may change during negotiations.  

Contact us

Want to know more about this topic? Read more of our New York office Snippets or reach out to one of our advisers mentioned below.