On 24 June 2026 the European Commission adopted its tax simplification package, two legislative proposals that would reshape parts of the EU's direct tax framework: an Omnibus on Direct Taxation and a recast of the Directive on Administrative Cooperation (DAC). The Commission estimates the package would save EU businesses around €8 billion a year, of which €3.3 billion in administrative costs. Both texts are proposals at the start of the legislative process. They require unanimity in the Council under Article 115 TFEU, with the European Parliament consulted, so their final shape and timing remain open.
A. The Taxation Omnibus
The Omnibus addresses the complexity that successive directives have added to cross-border taxation. Four measures matter most for corporate groups.
Withholding tax: a full exemption for cross-border payments of dividends, interest and royalties between EU companies. The proposal removes the minimum shareholding conditions (a 10% holding under the Parent-Subsidiary Directive 2011/96/EU and a 25% holding under the Interest and Royalties Directive 2003/49/EC) and any holding-period requirement, and moves relief away from upfront procedures toward simplified refunds. The Commission estimates the benefit at about €5.3 billion a year; on its own figures, roughly €3.4 billion of that is revenue currently collected only because of double taxation.
Interest limitation: the ATAD interest limitation rule (Article 4 of Directive (EU) 2016/1164) is simplified by removing Member State implementation options and making the de minimis threshold mandatory, with fewer restrictions on genuine third party and market financing. Estimated saving: over €500 million a year.
CFC and Pillar Two: the overlap between the ATAD controlled foreign company rules (Articles 7 and 8 ATAD) and the global minimum tax (the Pillar Two Directive (EU) 2022/2523) is removed, ending duplicate computations for groups within scope of both. Estimated saving: about €160 million a year.
R&D allowance: a new chapter in ATAD introduces a deductible research and development allowance equal to qualifying expenditure, including plant, machinery and tangible assets, set as a binding minimum standard. This positions ATAD, in part, as a competitiveness instrument and not only an anti-abuse one.
B. Dispute Resolution
The Omnibus also reaches the Tax Dispute Resolution Mechanisms Directive (Council Directive (EU) 2017/1852). The Commission's aim is to streamline, clarify and enhance that Directive. On its call for evidence and pre-adoption briefings, the changes are limited and targeted, concentrated on the admission phase, the stage at which competent authorities decide whether to accept a taxpayer's complaint (broadly, Articles 3 to 5), with the objective of removing ambiguities, securing a consistent application across Member States, and making the mechanism easier to use. This is where cross-border disputes most often stall, through divergent national approaches to admissibility and unilateral rejections, so even narrow changes here could affect access to the mutual agreement procedure and to arbitration. The operative text was not in the Commission's press release and will need close reading once published.
The Omnibus is also reported to touch other instruments, including the Merger Directive and the FASTER relief framework, to be confirmed against the final published texts.
C. The DAC recast
The second proposal consolidates the DAC (Directive 2011/16/EU) and its eight successive amendments into a single instrument and trims reporting obligations.
Reporting relief: groups subject to the 15% minimum tax under Pillar Two would no longer report under the DAC6 cross-border arrangements regime (about €300 million saved), and reporting of other low-value cross-border arrangements is removed, cutting reporting volumes by an estimated 35% (a further €40 million).
Substance hallmark: against that relief, the economic substance criteria under DAC6 hallmark D2 would be developed further through a Council implementing act. This carries the substance test over from the abandoned Unshell initiative, which the Commission intends to withdraw this year. For holding and financing structures, the substance question moves rather than disappears.
Platform reporting: the DAC7 threshold for online sales of goods is raised, removing obligations for more than 10 million private sellers, largely of second-hand goods, and saving platforms an estimated €678 million.
Other measures: a new tool to verify taxpayer identification numbers, and a new automatic exchange of information on the beneficial ownership of real estate.
D. What this means for you
For groups with Benelux holding or financing platforms, the withholding tax exemption is the headline. If adopted as described, it would reduce residual leakage and remove much of the procedural apparatus around directive and treaty claims. The benefit is contingent: it depends on unanimous Council agreement and on national transposition, and several Member States have asked that simplification not erode their revenues, which is precisely where roughly €3.4 billion of the headline saving sits.
For groups within scope of Pillar Two, the removal of the CFC overlap and the DAC6 carve out reduce duplication, but the new substance hallmark and the real-estate beneficial ownership exchange point the other way. Structures shaped by the Unshell debate should be reviewed against the substance criteria once the implementing act takes form.
None of this changes current obligations yet. Existing positions under the Parent-Subsidiary, Interest and Royalties, Anti-Tax Avoidance, DAC6 and DAC7 regimes continue to apply until a directive is adopted and transposed.
For cross-border disputes, the admission-phase amendments to Directive (EU) 2017/1852 are the part to watch. If they narrow the room for competent authorities to reject or delay complaints, they could improve access to the mutual agreement procedure and to arbitration for pending and future cases.
E. Next steps
The package now goes to the European Parliament for consultation and to the Council for adoption by unanimity. The incoming Irish Council presidency and the Commission have signalled that they hope to agree the DAC recast by the end of 2026. The Omnibus, which carries the revenue impact, is likely to be slower and more contested. Simplification of Pillar Two itself is not part of this package, despite calls from some Member States.
We are following the package closely and will report in detail once the draft directive texts are moving through the Parliament and the Council.
This newsflash provides general information on a Commission proposal as at 24 June 2026. It is not legal or tax advice and does not create a lawyer-client relationship.
Authors:
Jacques Malherbe, Simont Braun
Rik Strauven, Simont Braun
