EU tax omnibus package could cut compliance costs by €6.6 billion a year, Parliament research service says

Brussels, Belgium. The European Commission’s proposed reform of EU direct taxation rules could lower compliance costs and related financial burdens by €6.6 billion a year, according to a briefing released on Tuesday by the European Parliament’s Research Service (EPRS). The briefing says the plan would also simplify cross-border business and encourage investment.

Scope of the package

The proposal, called the tax omnibus package, was presented by the European Commission in June 2026. It aims to streamline existing rules on cross-border payments, corporate restructuring, interest deductions, anti-tax avoidance measures, tax dispute resolution and investment in research and development (R&D).

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The Commission wants to reduce the administrative burden that results from the interplay between European and international tax frameworks, which it regards as ever more complex for companies active in several jurisdictions.

Background on competence and complexity

The EPRS notes that direct taxation is still chiefly a matter for national authorities. The EU has nonetheless adopted shared provisions to help businesses operate across borders and to protect the tax bases of member states.

The Commission has stated that the parallel existence of European and international rules has made the system more complicated. In some cases this can lead to overlapping compliance duties or a risk of economic double taxation.

Directives affected and legislative process

The plan would amend six existing EU directives. They include those covering parent and subsidiary companies, interest and royalties, mergers, anti-tax avoidance and the mechanisms for settling tax disputes.

The European Parliament is expected to give an opinion, while the Council of the European Union will take its decision by unanimity. At present, the Parliament’s Committee on Economic and Monetary Affairs is examining the package.

Proposed changes to withholding tax

One of the planned changes would widen withholding tax exemptions on dividends, interest and royalties paid between companies in different EU member states. This would be done by scrapping certain minimum ownership thresholds and holding-period requirements, which could make it easier for firms to move income between related businesses across the bloc.

The proposal also adds a new safeguard against double non-taxation for interest and royalty payments made to third countries.