Tax Planning

Making the Most of the EU’s Tax Simplification Package: Strategies for Businesses

With the European Commission’s recent Tax Simplification Package (June 24, 2026) set to reduce compliance burdens and streamline cross-border tax rules, businesses can take concrete steps now to benefit.

By NomadicTax Research Team • 5-8 min read • August 28, 2026

## What’s in the Tax Simplification Package? On **June 24, 2026**, the EU adopted a major tax simplification package containing two legislative proposals: the **Direct Taxation Omnibus** and a **Recast of the Directive on Administrative Cooperation (DAC)**. These are designed to modernize EU direct tax rules and simplify administrative cooperation among Member States. ([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?utm_source=openai)) Key measures include: - Abolition of withholding taxes on cross-border payments of dividends, interest, and royalties between EU companies to ease cross-border investment. ([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?utm_source=openai)) - Consolidation of nine existing DAC directives into a single, coherent instrument with clearer reporting rules to avoid duplication and reduce burdens. ([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?utm_source=openai)) - The removal of reporting obligations on certain multinational enterprise (MNE) groups that are already subject to the 15 % global minimum tax (“Pillar Two”) generating annual compliance cost savings estimated at about **€300 million**. ([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?utm_source=openai)) - Increase in the reporting threshold for online sales of goods, expected to relieve over **10 million private sellers** (mostly second-hand goods) from reporting obligations. ([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/document/download/bee8b767-1f9e-44aa-9910-faa8bc31a880_en?filename=190626_Tax+Simplification+Package_Factsheet_.pdf&utm_source=openai)) - New minimum standard for R&D-related tangible asset treatment across the EU to encourage innovation and investment. Estimated boost to EU GDP: ~0.2 % per year. ([taxation-customs.ec.europa.eu](https://taxation-customs.ec.europa.eu/document/download/bee8b767-1f9e-44aa-9910-faa8bc31a880_en?filename=190626_Tax+Simplification+Package_Factsheet_.pdf&utm_source=openai)) ## Implications for Businesses: What You Need to Know This package will affect all types of businesses operating cross-border within the EU – from SMEs to large multinationals. - **Reporting relief**: If your group is already subject to Pillar Two rules, several reporting obligations will be lifted. If you’re a private seller of goods online, the elevated threshold may take you out of certain reporting requirements. Be prepared to assess your group’s status. - **Withholding taxes removed**: For intra-EU corporate payments, you may now avoid withholding taxes on interest, dividends, royalties—depending on your structure and where subsidiaries are established. - **Harmonization**: With a single DAC directive, expect common standards, forms, and procedures across Member States. Less fragmentation—good for centralised treasury or tax teams. - **Innovation incentives**: The R&D asset treatment alignment can improve after-tax return on eligible investments. Review your R&D capital assets and depreciation or relief policies in each country. ## Actionable Steps to Prepare Here are steps you can take to benefit from the new rules and guard against risk: 1. **Map your group under Pillar Two**: Determine whether you already fall under the 15 % global minimum tax rules. If so, evaluate what reporting obligations will be removed and update internal compliance workflows. 2. **Conduct a withholding tax audit**: Identify current cross-border payment flows of interest, royalties, dividends. Model savings based on elimination of applicable withholding taxes. 3. **Review online seller operations**: If you or your customers are acting as private sellers online, check current thresholds to see if upgraded DAC recast thresholds exempt you. 4. **Update internal tax reporting and systems**: Datasets, forms, IT platforms will need updates as DAC is codified; consistency, common formats (e.g. XML) are increasingly required. 5. **Revisit R&D investment strategy**: With harmonised tax treatment of R&D assets across EU, there may be tax advantages in shifting where you locate R&D assets or investments. ## Real-World Example A small EU-based software firm with subsidiaries across Germany and Spain currently paying 5 % withholding tax on royalties paid to Germany. Under the Omnibus, that should drop to zero under the intra-EU payments removal, improving cash flow. Similarly, a marketplace facilitating sales of second-hand items by private sellers may no longer have to collect DAC-related online seller reporting where sellers fall under the new higher thresholds. ## Challenges & Watch-Outs - Member States will need to adopt the proposals into national law; during that process, unexpected divergences or delays may emerge. - Even if withholding tax requirements are abolished, rebate or treaty-related paperwork may still apply to document eligibility. - The alignment of R&D asset treatment may not include all Member States or may come with conditions (e.g. how “tangible assets” are defined, eligible activity). ## Takeaway If you operate across borders in the EU, this simplification package offers **high impact savings and reduced compliance**—but only if you act proactively. Evaluate your status under Pillar Two, audit withholding tax flows, update reporting systems, and adjust your tax planning around innovation. The sooner you begin adapting, the more value you’ll capture.