Compliance
Compliance 2026: Navigating the EU’s New Tax Simplification and DAC Reforms
Businesses operating across the EU must adapt quickly to the Commission’s sweeping simplification proposals, changes under DAC, and evolving reporting obligations.
By NomadicTax Research Team • 6 min read • August 15, 2026
## Overview of the EU Simplification Drive
On 24 June 2026, the European Commission put forward a package aimed at simplifying EU tax laws through two major proposals: the **Direct Taxation Omnibus Directive** and a **recast of the Directive on Administrative Cooperation (DAC)**. These are currently **proposed**, not yet enacted.([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/news/european-commission-proposes-landmark-tax-simplification-package-streamline-compliance-and-boost-2026-06-24_en?prefLang=fi&utm_source=openai)) The changes are expected to reduce administrative burdens by nearly **€8 billion annually**, including savings for digital platforms and cross-border investment flows within the Single Market.([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/news/european-commission-proposes-landmark-tax-simplification-package-streamline-compliance-and-boost-2026-06-24_en?prefLang=fi&utm_source=openai))
## Key Changes Relevant to Compliance
| Area | What’s Changing | Implication for Multinationals & Platforms |
|---|---|---|
| Withholding taxes | Dividends, interest, royalties paid between EU companies would no longer be subject to cross-border withholding tax under the Omnibus proposal. | Reduces tax leakage and improves cash flow across group entities. Need to assess treaty impacts and local withholding-tax regime changes. |
| DAC6 & DAC7 reporting | Reporting requirements for cross-border arrangements & platform income to be removed for MNEs already under Pillar Two; monetary threshold changes under DAC7.([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai)) | Platforms with large numbers of sellers must review whether sellers fall above or below thresholds; potential relief from redundant DAC filings. |
| Common notification obligation | Consolidation of reporting under DAC4 (country-by-country) and DAC9 (GIR) notification obligations; harmonised templates.([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai)) | Simplifies corporate reporting burden, but need to align internal data collection and audit controls. |
## Practical Steps to Ensure Compliance
1. **Map cross-border operations**: Identify all EU jurisdictions where you have entities or platform activities; determine which DAC obligations apply.
2. **Review reporting thresholds and obligations**: For DAC6, DAC7, assess whether you qualify for relief or fall below reporting thresholds under the new proposals.
3. **Monitor legislative progress**: These proposals are not yet law. Check EU Council and Parliament deliberations; begin aligning internal policies for anticipated changes.
4. **Upgrade systems**: Harmonise notification templates, tax identification number (TIN) verification, data exchange systems internally ahead of centralised requirements.([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai))
5. **Train staff and engage advisors**: Compliance leads, tax counsel, and finance teams must understand upcoming shifts so audit trail and documentation practices meet both current and incoming standards.
## Case Example
Suppose a digital platform in Germany hosts 12,000 sellers, some selling used goods. Under current DAC7 rules, marketplace operators must report sellers’ income. Under the proposed reform, private sellers dealing in second-hand goods may be relieved of reporting obligations, and those already subject to Pillar Two may be exempted from DAC6. If the platform assesses that most sellers are private and transaction values low, it might show relief under new thresholds and reduce reporting costs. Early system updates to verify which sellers qualify will smooth transition.
## Risks and Things to Watch
- Timing and uncertainty: Because proposals have not yet been adopted, compliance requirements may change before final text.
- Divergent domestic implementing measures: Even with EU Directives, Member States may interpret details differently—stay tuned for national legislation.
- TIN verification or data sharing challenges: New measures on accuracy and centralised TIN systems may require coordination with local regulators.([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/document/download/a654ad8e-606b-4ad5-a8ff-3309554224d7_en?filename=Executive+Summary+of+Impact+Assessment_DAC_Proposal+for+a+Council+Directive+-+Taxation%E2%80%99.pdf&utm_source=openai))
## Benefits to Businesses
- Reduced administrative cost and complexity, especially for MNEs and platforms.
- Better cash flow with reduced withholding tax in EU-only cross‐border payments.
- Improved certainty and legal clarity when cross-border legislative harmonisation takes effect.