European Commission Adopts Tax Simplification Package: Taxation Omnibus and DAC Recast

The European Commission adopted a tax simplification package on 24 June 2026 comprising a Direct Taxation Omnibus Directive and a recast of the Directive on Administrative Cooperation (DAC), estimated to save EU businesses around EUR 7.9 billion annually. The Taxation Omnibus would abolish withholding taxes on cross-border dividend, interest and royalty payments between EU companies, set a common minimum standard for immediate R&D expensing, and streamline the interaction between Controlled Foreign Company rules and the Pillar Two global minimum tax. The DAC recast consolidates nine existing administrative-cooperation directives into one, cutting low-value cross-border reporting by 35% and removing Pillar Two reporting duties for roughly 3,000 multinational groups.

• Proposes abolishing withholding taxes on cross-border dividends, interest and royalties between EU companies
• Sets common minimum standard allowing full immediate expensing of R&D investment
• Recasts DAC to consolidate nine existing directives into one coherent instrument
• Removes Pillar Two reporting obligations for around 3,000 multinational groups and cuts low-value arrangement reporting by 35%
• Raises the reporting threshold for online sellers, affecting over 10 million sellers