Tax Planning
Simplification Package Deep Dive: Tax Planning Opportunities in EU’s June 2026 Reforms
The EU’s tax simplification proposals promise savings of €7.9 billion annually — here’s where businesses can plan to benefit under ATAD, CFC rules, interest limitation, R&D expensing, and cross-border investments.
By NomadicTax Research Team • 5-8 min read • September 7, 2026
## What is the simplification package?
Published 24 June 2026, the EU Commission introduced two major legislative proposals—the **Direct Taxation Omnibus Directive** and the **Recast Directive on Administrative Cooperation (DAC)**—designed to simplify cross-border tax rules, reduce administrative burdens and harmonise aspects of direct taxation. Estimated savings amount to about **€7.9 billion per year**, with €3.3 billion in administrative cost savings for 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))
### Key Areas for Tax Planning
- **Abolition of withholding taxes** on cross-border payments (dividends, interest, royalties) between EU companies. Plan to use these exemptions once the Omnibus is enacted.
- **Extension of Parent-Subsidiary Directive** to pension institutions will allow them to avoid withholding tax on dividends from EU subsidiaries. Useful if you're a pension fund or institutional investor.
- **Full immediate expensing** for R&D-related tangible assets proposed in all Member States—accelerates deduction, boosting incentives for investment in innovation.
- **Harmonised Controlled Foreign Company (CFC) rules**, aligned with the Pillar 2 global minimum tax, which remove overlapping obligations and make planning more predictable.
- **Modernised interest limitation rules** under ATAD: removal of certain options, increased de minimis thresholds, reducing compliance drag.
## Strategies for Businesses to Capitalise
1. **Timing of investments**: Delay large R&D-asset purchases until after reforms are enacted to benefit from immediate expensing in full.
2. **Restructure financing flows**: Once interest limitation rules are simplified, re-evaluate high leverage structures currently limited under ATAD.
3. **Use cross-border entity combinations**: Mergers or reorganisations may become easier under Tax Merger Directive expansions.
4. **For pension funds**: Explore dividend receipts from EU affiliates under new extension of Parent-Subsidiary rules.
## Risks & Watchpoints
- **Legislation not yet adopted**: These are proposals. Until Council & Parliament approve, benefits are uncertain and timelines unclear.
- **National divergence** before harmonisation**: Some Member States may retain more restrictive rules until harmonised standards kick in.
- **Interaction with Pillar 2 / DAC**: Simplified rules may intersect with new mandatory tax information exchange obligations—double-check disclosure risks.
## Example Use Case
A tech company based in Austria considering moving its R&D centre from Italy:
- Post-Omnibus, the Austrian entity may immediately expense new R&D plant investment.
- Dividend flows back to Austrian parent from EU subsidiaries may be exempted from withholding.
- Ensure parent-subsidiary structures are reorganised before interest limitation changes take effect.
Proactive tax planning in light of these reforms can yield tangible cash-flow benefits. Companies that prepare now—analyzing country-specific implementation and legislative timing—are best positioned to benefit once reforms come into force.