European Commission Adopts Tax Simplification Package to Boost EU Tax Competitiveness, Reduce Administrative Burdens

Short summary

The European Commission adopted the Tax Simplification Package on 24 June 2026, targeting EUR 8 billion in annual compliance cost savings through an Omnibus Directive amending six EU tax directives. Key changes include abolishing minimum holding requirements for withholding tax exemptions, easing interest limitation rules with a mandatory 30% EBITDA deduction and EUR 3 million safe harbour, introducing a new EU-wide R&D allowance, and simplifying CFC rules. Negotiations run through Q4 2027 with implementation due by 31 December 2028 and entry into force on 1 January 2029.

• •EUR 8B annual compliance savings targeted via Omnibus Directive amending six EU tax directives
• •Withholding tax relief expanded: IRD 25% and PSD 10% minimum holding requirements abolished; self-assessment replaces prior authorisation
• •Interest limitation eased (30% EBITDA deduction, EUR 3M safe harbour); new EU-wide R&D allowance; CFC rules simplified with Pillar Two exemption

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