Tax Planning
Top EU Tax Planning Moves Under the Taxation Omnibus & DAC Recast
The EU has kicked off sweeping proposals to simplify direct taxation and administrative cooperation—transformative changes that could reshape cross-border tax planning and compliance for all businesses in the Single Market.
By NomadicTax Research Team • 5-8 min read • September 9, 2026
## EU’s Taxation Omnibus & DAC Recast: A Game‐Changer for Tax Planning
On **24 June 2026**, the European Commission put forward two landmark legislative proposals: the Taxation **Omnibus Directive** and the **Recast of the Directive on Administrative Cooperation** (DAC). These aim to streamline tax rules, reduce compliance burdens, and improve cross-border investment opportunities. ([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))
Here’s what matters for tax planning:
### Key Proposals You Should Know
| Measure | What’s Changing | Planning Opportunities/Challenges |
|---|---|---|
| **Withholding Taxes** | Abolition of withholding taxes on cross-border payments of dividends, interest, and royalties between EU companies. Extension of Parent-Subsidiary Directive to 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?prefLang=fi&utm_source=openai)) | For EU corporates/pension funds investing across Member States, this removes a major double taxation cost. Must monitor when/how Member States implement—and any transitional rules. |
| **CFC Rules + Pillar Two** | Harmonised model for CFC regimes; clearer interaction with global minimum tax (Pillar Two). ([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)) | Plan structures to avoid double counting, ensure CFC thresholds and calculations align across jurisdictions. |
| **Interest Limitation (ATAD)** | Removal of national implementation options; de minimis threshold increases; exclusion of low-risk third-party borrowing and market-based financing in scope. ([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)) | Take advantage of expanded threshold; review debt vs equity financing; ensure your financing is in the excluded low-risk category where possible. |
| **DAC Simplification** | Exclude companies subject to Pillar Two from DAC6; remove some hallmarks; raise DAC7 monetary threshold (to EUR 3,000); combine DAC4 & DAC9 into a single notification; centralised TIN verification; remove life insurance category from DAC1. ([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)) | Lower reporting obligations can reduce cost—but require tracking eligibility. Example: a multinational above Pillar Two threshold may need fewer disclosures under DAC6; small platforms under new DAC7 threshold might be exempt. |
### Practical Examples
- A pension fund in Germany receiving dividends from a subsidiary in France will benefit once withholding taxes between Member States are abolished.|
- An SME operating through digital platforms across borders may find itself exempted from certain DAC7 reporting if its income is under EUR 3,000.|
- Companies with complex financing arrangements should map existing debts to assess if they qualify for exclusion under revised ATAD interest limitation. |
### Actionable Insights for 2026-2027
1. **Assess whether you fall under Pillar Two**, as that triggers certain exclusions (especially under DAC6). Identify whether Pillar Two applies to your group.
2. **Track national transpositions**—Member States must implement these directives; be ready for variation in deadlines and rules.
3. **Revise your group financing policies** to benefit from interest deduction changes.
4. **Document your reporting obligations**, especially under DAC6, DAC7, DAC4 & DAC9; leverage any new exemptions or thresholds.
5. **Monitor legislative updates and impact assessments**, since the Commission will likely refine hallmarks and thresholds further. |
The Omnibus & DAC Recast are not yet fully in force. Their transformative potential hinges on how Member States transpose and implement them—but tax planning strategies developed now will provide big head starts once they become law.