Tax Planning
Tax Simplification Package 2026: Using the Omnibus & DAC Recast to Reduce Your Tax Burden
The EU's recent ‘Taxation Omnibus’ and DAC Recast proposals promise billions in compliance savings. Here's how companies can take advantage, and what tax planning strategies to align with the new rules.
By NomadicTax Research Team • 5-8 min read • August 31, 2026
## What’s New: The Tax Simplification Package
On **24 June 2026**, the European Commission introduced a sweeping package including the **Direct Tax Omnibus Directive** and a recast of the **Directive on Administrative Cooperation (DAC)**. These are designed to modernise EU direct taxation, streamline compliance, and eliminate overlapping burdens. Estimated savings for businesses are approximately **€7.9 billion annually**, with around **€3.3 billion** coming from 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?utm_source=openai))
Major changes include:
- Removal of withholding taxes on **cross-border EU payments** of dividends, interest, royalties among companies, including pension institutions. ([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))
- **Full immediate expensing** for R&D-related tangible assets in all Member States, harmonising incentives for innovation 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))
- Harmonising CFC (Controlled Foreign Company) rules and streamlining ATAD interest limitation rules, including removing certain implementation options and raising de minimis thresholds. ([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))
- Simplifying DAC reporting: reducing DAC6 obligations for companies already under Pillar Two, removing low-value, low-impact hallmarks, streamlining notifications for country-by-country (DAC4) and top-up tax returns (DAC9). ([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))
## Tax Planning Opportunities & Strategies
**1. Review withholding tax uses**: Post-Omnibus, EU-EU payments of dividends, interest, and royalties may be exempt. For companies that structure via pensions or intermediate entities, consider how these changes affect cash flow or cross-border holding setups.
**2. Immediate expensing of R&D assets**: If you invest in R&D-related equipment (machinery, lab equipment, etc.), domicile in Member States that quickly adopt full expensing can accelerate deductions, improving NPV of investments.
**3. Harmonise CFC structures**: Examine whether your foreign low-taxed subsidiaries might now be more exposed under Pillar Two; align your corporate structures to avoid paying extra top-up tax or facing additional CFC burdens.
**4. Revise reporting workflows**:
- If your group is subject to DAC6, assess hallmarks you report—some may be removed or redefined.
- If filing country-by-country reports (DAC4) or top-up returns (DAC9), expect new harmonised templates and notification deadlines.
## Compliance Check and Risk Mitigation
- Keep documentation ready for cross-border income/royalties/interest flows to claim exemptions and avoid mis-withholding.
- MNEs must monitor Pillar Two status: companies under the Global Minimum Tax regime might fall out of or into certain reporting obligations.
- Stay alert for national transposition timings: these directives are proposals now; Member States must adopt them into domestic law, which includes public consultations and potential legislative delays.
## Example Insights
- A German holding company receiving royalties from its French subsidiary will likely see withholding tax eliminated under the Omnibus once rules are in force, increasing cash retained across the group.
- A biotech SME in Spain acquiring expensive R&D-equipment can deduct full cost immediately under new expensing rules, improving its tax profile and cash flow.
- An MNE with shell-company structures may need to simplify those to avoid triggering CFC or Pillar Two burdens under harmonised rules.
## Action Plan: What to Do Now
- Map your cross-border payments and check future withholding exposure.
- Inventory your R&D-related tangible assets and assess where full expensing will generate meaningful benefits.
- Adjust your accounting and reporting systems in anticipation of revised DAC6/DAC4/DAC9 rules.
- Engage with tax advisers to monitor national legislative drafts to ensure compliance and to maximize benefits of these changes.
**Conclusion**: The Tax Simplification Package offers a powerful incentive to align tax planning with upcoming EU reforms. For entities doing business across borders or investing in innovation, acting early could unlock thousands to millions in annual savings depending on scale.