Tax Planning

Tax Simplification and the Omnibus: What EU MNEs Should Plan for Now

With the EU’s proposed ‘Taxation Omnibus’ and recast DAC, multinational groups face a changing regulatory landscape—understanding pending changes now can inform tax structuring, reporting, and entity setups to reduce risks and compliance burdens.

By NomadicTax Research Team • 5-8 min read • August 15, 2026

## Overview of the Proposed Simplification Package The European Commission on **24 June 2026** adopted major proposals to simplify EU direct taxation and administrative cooperation. The package includes two central elements: the **Taxation Omnibus Directive** and the **Recast Directive on Administrative Cooperation (DAC)**. These proposals are **pending adoption** by the European Parliament and Council. ([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 features of the Omnibus include: - **Abolishment of withholding taxes** on cross-border dividends, interest, and royalties between EU companies. Used to avoid double taxation but also created structures; elimination will simplify structures for intra-EU groups. ([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)) - **Extension to pension institutions** under Parent-Subsidiary Directive benefits. ([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)) - **Immediate expensing** of R&D-related tangible assets, changing capital allowance rules in many 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?prefLang=fi&utm_source=openai)) - **Harmonisation of CFC rules** with Pillar Two’s global minimum tax, and simplification of interest limitation under ATAD. ([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)) From the DAC side, key changes include: - **Consolidation** of DAC1-DAC9 into a single codified Directive to reduce confusion and variation across countries. ([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)) - **Reduction of reporting burden**: removing reporting requirements for certain cross-border arrangements for MNEs already under Pillar Two; cutting irrelevant or low-value digital platforms and second-hand goods reporting. Estimated savings: hundreds of millions annually. ([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)) - **Stronger data quality rules**, improved taxpayer identification numbers (TINs), and clearer procedural rules for DAC6 (cross-border arrangements). ([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)) ## Implications for Entity Setup & Planning - Structures relying heavily on withholding tax benefits across EU may need reviewing as beneficiary entities (dividends or royalties flows) may no longer have relief—this could influence location choices of parent, finance or IP-holding entities. - For R&D assets: immediate expensing may enhance investment decisions; businesses should evaluate timing of asset acquisitions to maximise benefit. - Harmonised CFC rules may reduce arbitrage; ensure entities in low-tax jurisdictions are ready for consistent rules across Member States. ## Reporting & Compliance Actions to Prioritize Now 1. **Mapping reporting obligations** under existing DAC provisions vs named forthcoming recast—identify cross-border arrangements, digital platform income, second-hand goods sales etc. 2. **Data quality audit**, especially of taxpayer identification numbers (TINs), ensuring correct formats, verifications, accuracy ahead of stricter rules. Many States already flagged issues with fragmented implementations. ([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)) 3. **Update internal systems** to anticipate central filing options under DAC and Pillar Two – potentially file top-up tax information return at group level rather than each constituent entity. ([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)) 4. **Evaluate withholding reliefs** and ensure that supportive structures (contracts, documentation, company form) are in place or can be adapted quickly in case of abolishment of withholding taxes. 5. **Engage with tax authorities or advisors** in each Member State to monitor how proposals may be adopted locally; transitional provisions may vary. ## Example Scenarios - An EU-based multinational with finance subsidiary distributing interest to sister EU companies may see simpler flows if withholding taxes removed; documentation burdens may drop, but also consider whether current treaties or national regimes get adjusted. - A startup doing R&D in multiple Member States could benefit by purchasing tangible assets before the end of 2026 if expensing is phased in, or plan asset acquisition timelines accordingly. - Digital platforms managing second-hand goods from private sellers can expect reduced reporting obligations—platform operators should observe thresholds and definitions to avoid overreporting in meantime. ## Risks & What to Watch - Delays or modifications as proposals proceed through legislative process; what is proposed is not yet law. - Divergence in national transposition—although the aim is harmonisation, implementation dates and details may vary across Member States. - Transition periods may impose dual compliance burdens if companies must comply with both old and new rules in parallel. **Summary:** The Omnibus and DAC recast represent sweeping proposed reforms in EU tax law focused on simplification, reduced compliance costs, and aligning rules across the internal market. Multinationals should use the remaining time to review current structures, update reporting and data practices, and plan investments to take advantage of upcoming expensing or relief changes.