Tax Planning
Tax Planning in 2026: Leveraging the EU Omnibus Proposal for Innovation & Investment
The recent EU Omnibus Proposal offers immediate expensing for R&D, withholding tax exemptions and harmonised CFC rules—offering planning opportunities for investment-heavy businesses.
By NomadicTax Research Team • 5-8 min read • August 24, 2026
## What is the EU Omnibus proposal?
On **24 June 2026**, the European Commission adopted a **tax simplification package** consisting of two complementary proposals: the **Direct Taxation Omnibus Directive** and the **Recast of the Directive on Administrative Cooperation (DAC)**. ([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 goals are to reduce burdens, modernise the direct tax framework, cut red tape, and support EU competitiveness. Estimated savings: ~**€7.9 billion annually**, including ~€3.3 billion in reduced administrative costs. ([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 planning-relevant elements in the Omnibus
- **Withholding tax exemptions**: Elimination of withholding taxes on cross-border payments of **dividends, interest, and royalties** between EU companies. ([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))
- **R&D-related tangible assets / immediate expensing**: All Member States will be encouraged or required to allow full immediate expensing of R&D-related tangible assets. This is designed to promote innovation and capital 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?prefLang=fi&utm_source=openai))
- **Harmonised Controlled Foreign Company (CFC) rules**: The proposal seeks to streamline existing CFC regimes and reduce overlap with Pillar Two rules. ([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))
- **Interest limitation rule updates**: Removal of implementation options, raising of the mandatory de minimis, and exclusion of certain low-risk third-party debt or market-based financing from the restriction. ([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))
- **Tax Merger Directive expansions**: Tax neutrality for cross-border corporate reorganisations (mergers, divisions, asset transfers). ([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))
## How to leverage these changes
### For businesses investing in R&D
- Accelerate investment in R&D tangible assets before the rules come into force to benefit from **immediate expensing** where applicable.
- Structure R&D projects through subsidiaries in Member States where local implementation of the immediate expensing rule will have favorable tax depreciation.
### For finance-heavy groups or real estate/fintech groups
- Previously, withholding taxes on interest, royalties, dividends between corporate EU entities created friction. Under the Omnibus, those will be eliminated—leading to cash flow & return improvements. Plan internal financing and royalty flows to reside wholly within EU entities to benefit.
- Review current CFC regimes and compare with Pillar Two exposure: the harmonisation may reduce double compliance or overlap.
### For cross-border M&A and reorganisations
- The expanded Tax Merger Directive provisions will facilitate **tax-neutral reorganisations**. If restructuring or carving out part of operations, timing and structure matter to qualify.
## Risks & things to watch out for
- The proposals are **not yet law**: they must be adopted by the European Parliament and Council. Delays or amendments may affect timing and substance. ([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))
- Member State implementation may vary—national lawsuits, transitional provisions, or conditions may alter the benefits. Always align domestic law implementation timelines.
- Revenue loss concerns: measures like withholding tax exemptions and immediate expensing reduce CIT or withholding tax yield in the short term. Ensure your planning accounts for possible changes.
## Example planning scenario
A French biotech company plans to build a new R&D facility with expensive lab-tangible equipment in Hungary. With the Omnibus, if immediate expensing is adopted fully, the company could expense the cost the year it occurs—much faster than the traditional depreciation timeline. Similarly, royalty payments from a Spanish affiliate to the French parent could soon avoid withholding tax entirely if both are within the EU and the withholding key applies. The company should monitor national law implementing these Omnibus proposals to know exactly when benefits are available.
## Actionable steps for finance & tax teams
1. Track legislative developments in your country for Omnibus and DAC recast directives.
2. Model cashflow impacts of withholding tax removal & immediate expensing if adopted locally.
3. Map internal group financing / royalty flows where withholding applies currently. 4. Engage with tax counsel about structuring reorganisations or asset transfers under the expanded Tax Merger regime ahead of time.
## Bottom line
For innovators, M&A players, multinationals, and finance groups, the EU Omnibus proposals offer a package rich in planning opportunities: **accelerated deductions, cross-border tax flow relief, and simpler compliance**. But firms must act early—understand their national implementation, prepare the structure, and build in flexibility to adapt to changes ahead.