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EU Tax Simplification Package: What Businesses Should Know About Omnibus & DAC Recast
The EU’s recently adopted simplification package aims to cut business tax burdens by almost €8-billion annually — here’s what Omnibus and DAC Recast legislation mean in practice for cross-border operations.
By NomadicTax Research Team • 5-8 min read • August 15, 2026
## Overview of the EU’s Tax Simplification Package
On **24 June 2026**, the European Commission unveiled its Tax Simplification Package, comprising two major proposals:
1. **Omnibus on Direct Taxation** – simplifies EU direct tax rules, removes outdated provisions, and eliminates certain withholding taxes between EU companies on dividends, interest, and royalties. ([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))
2. **Recast of the Directive on Administrative Cooperation (DAC)** – combines nine existing directives into a single framework, significantly reducing reporting obligations for many businesses. ([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))
These measures expect to deliver around **€7.9-8 billion per year** in compliance savings, including up to **€3.3 billion** in administrative cost reductions. ([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 Provisions That Affect Cross-Border Businesses
| Change | What It Means Practically |
|---|---|
| **Abolition of withholding taxes between EU companies** | Enables profit distributions, interest, and royalties to flow within EU affiliates without source-country levies. Easier cash repatriation. ([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))|
| **Smaller reporting burden under DAC** | Groups already under the 15 % global minimum tax (Pillar Two) may skip many cross-border tax arrangement disclosures. Others remove certain disclosures that showed minimal value. Overall volume down ~35%. ([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))|
| **Coherent legal instrument** | Consolidates disparate rules into a single directive, enhancing certainty for companies operating across multiple EU jurisdictions. ([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))|
## Strategic Implications for Global Tax Planning
* **Intra-EU investment becomes cheaper and smoother**
If you own EU subsidiaries or engage in transactions between EU group entities, the abolition of withholding means more capital remains after tax. Example: an EU parent bank issuing a loan to its EU affiliate would no longer suffer withholding on interest earned under old rules.
* **DAC Recast may reduce compliance costs**
Multinational Enterprise (MNE) groups subject to Pillar Two can expect fewer disclosures. For those not yet under Pillar Two, evaluate whether restructuring tax arrangements will simplify obligations. Effective tax reporting, transfer pricing policies, and documentation strategies will gain greater importance.
* **Timing and legislative progress matter**
These proposals still need approval by the EU Council and Parliament. Businesses should monitor the adoption timeline. Changes won’t be instantaneous — anticipate implementation over the next 12–24 months.
## Actionable Next Steps for Businesses
1. **Map intra-EU financing structures** — identify where withholding taxes currently apply on dividends, interest or royalties that might be eliminated.
2. **Audit current DAC reportable arrangements** — assess whether your disclosure obligations will change; potentially remove or modify structures of limited benefit to both the business and tax administrations.
3. **Engage with your tax counsel** — ensure your transfer pricing and tax treaties work under the new regimes.
4. **Monitor legislative progress** — once directives are adopted, member states will transpose rules domestically; apply widely to all EU-operating companies.
**Conclusion**: The EU Simplification Package streamlines EU-wide direct taxation and administrative cooperation. For global entities and businesses operating across the EU, this spells fewer delays, lower costs, and more predictable tax outcomes. With early planning, you’ll position your operations for maximal benefit under the new rules.