Member States reach a political agreement on DAC9
During the ECOFIN meeting on Tuesday 11 March 2025, Member States reached a political agreement on the ninth amendment of the Directive on administrative cooperation in the field of taxation (DAC9), aiming to simplify compliance obligations for multinational enterprise groups (MNEs) under the Pillar Two Directive. The proposal will allow in-scope MNEs under Pillar Two to fulfill their filing obligations only once in the Member State of the Ultimate Parent Entity (UPE) or of the designated filing entity, rather than requiring filing a top-up tax information return in each Member State where constituent entities are located. The last sticking point in the negotiations was a provision that would grant the European Commission power to quickly make future updates, through delegated acts, to the EU standard form for the top-up tax information return to align it with any future updates of the OECD’s standardised GloBE Information Return (GIR). The final agreement foresees that the standard form will be amended through a Council Directive under the special legislative procedure and the unanimity rule. In an annexed statement, the European Commission committed to table any necessary legislative proposals in an expedited manner to ensure alignment with relevant international developments. The Directive will now be formally adopted by the Council in the coming weeks once the legal linguistic work has been completed. Member States will have to implement DAC9 by 31 December 2025.
EU Finance Ministers ask for a tax decluttering Action Plan by Autumn 2025
On Tuesday 11 March, EU Finance Ministers adopted, without discussion, conclusions on a tax decluttering and simplification agenda. Among other things, the conclusions call for a review of the existing EU legislative framework in the area of taxation that should be based on four principles, also to be applied to current and future tax initiatives: - reducing the reporting, administrative and compliance burdens for Member States’ administrations and taxpayers; eliminating outdated and overlapping tax rules; - where relevant, increasing the clarity of tax legislation; and - streamlining and improving the application of tax rules, procedures and reporting requirements. This process could include a review of the existing Directive on administrative cooperation in the field of taxation (DAC), in particular in relation to reportable cross-border arrangements, and of the Directive laying down rules against tax avoidance practices (ATAD) that directly affect the functioning of the internal market, Ministers say. The Council invites the Commission to consult relevant stakeholders and introduce an “operational, pragmatic and ambitious action plan including a feasible timeline and a road map of the envisaged work” before the end of the Autumn 2025.
EU Finance Ministers welcome the first Omnibus packages
On Tuesday 11 March, EU Commissioner for Simplification, Valdis Dombrovskis, presented to EU Finance Ministers the two so-called Omnibus packages (Omnibus I and Omnibus II) of simplification measures released on 26 February and which include amendments to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Carbon Adjustment Mechanism (CBAM) and the InvestEU Regulation. Although Member States are still in the process of thoroughly analysing the recent legislative packages, Finance Ministers generally welcomed the simplification measures as being “balanced” and “useful”. They supported the speeding up of the negotiations on the so-called “stop the clock” proposal to delay the application of the CSRD for companies that have not started reporting yet and the transposition and application of the CSDDD and hoped that the European Parliament will also be ready to follow this approach. Simplification should not be seen as deregulation, they largely outlined. The debate can be watched again here. A similar discussion took place at the Competitiveness Council on Wednesday 12 March.
The ViDA package formally adopted
EU Finance Ministers formally adopted on Tuesday 11 March the VAT in the digital age (ViDA) package, that was agreed in November 2024. The package will fully digitalise VAT reporting obligations for cross-border transactions by 2030 with businesses issuing e-invoices for cross-border business-to-business transactions and automatically reporting the data to their tax administration. This formal adoption takes place after the re-consultation of the European Parliament in February due to the substantial differences between the Commission's initial proposal and the text agreed upon by the Member States. The package will enter into force on the twentieth day following its publication in the Official Journal of the EU. While the Regulation and the Implementation regulation of the package are directly applicable, the Council directive amending directive 2006/112/EC as regards VAT rules for the digital age will have to be transposed into national law.
Spain referred to CJEU over its discriminatory tax treatment of non-resident taxpayers
The European Commission decided on Wednesday 12 March to refer Spain to the Court of Justice of the European Union (CJEU) for having failed to remedy an infringement related to the free movement of capital due to a discriminatory tax treatment of non-resident taxpayers. When a payment for transfer of assets is deferred for longer than a year or is paid in instalments over a period longer than a year, resident taxpayers may pay the tax either when the capital gain accrues or proportionally deferred on a cash flow basis. However, in Spain, non-resident taxpayers are not offered this possibility of deferral and must pay the tax when the capital gains accrue at the time of the transfer of the assets. On 2 December 2021, the Commission sent Spain a letter of formal notice followed by a reasoned opinion on 23 May 2024. In its formal replies, and in subsequent technical exchanges with national authorities, Spain has maintained that its tax legislation is in line with EU law. The Commission considers that efforts by the authorities have, to date, been insufficient and is therefore referring Spain to the Court of Justice of the European Union. On the same day, it also urged Spain to align its rules on withholding taxes charged on royalty payments received by non-resident taxpayers with the EU’s freedom to provide services.
COMPET Council gives orientations for the future Horizontal Single Market Strategy
The Competitiveness (COMPET) Council held on Wednesday 12 March a policy debate on the future Horizontal Single Market Strategy, expected for May-June 2025. The debate took place on the basis of a background note prepared by the Polish Presidency of the Council of the EU, which asks the European Commission to present an Action Plan for Services, with clear timelines and milestones for urgent and concrete actions, in the context of the preparation of the Horizontal Single Market Strategy. The Single Market Commissioner, Stéphane Séjourné, confirmed that the Commission will present such a roadmap at the COMPET Council on 22 May 2025. During the exchange of views, many Member States asked for a sector-based approach and to have a monitoring with indicators to measure the effectiveness of the measures. They mainly said that e-declarations are important and that a better use of digital tools should be made. Regarding priority areas, many Member States explicitly said they want to see progress on the recognition of professional qualifications - including for regulated professions -, the posting of workers, permitting and the implementation of the Services Directive. As an AOB point, Finland presented a joint non-paper on the new Horizontal Single Market Strategy, co-signed with 15 other Member States (Croatia, Czechia, Estonia, Germany, Ireland, Latvia, Lithuania, Malta, the Netherlands, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden).
