Key takeaways from the ETAF Conference “Decluttering without diluting the EU tax system”
On Tuesday 3 June, the European Tax Adviser Federation (ETAF) hosted a conference in Brussels on the theme “Decluttering without diluting the EU tax system”, attended by EU officials, tax experts and over 1 600 online participants. ETAF President Philippe Arraou opened the event by stressing that tax simplification must lead to a smarter, clearer and balanced tax system. The first panel, moderated by Saim Saeed (Bloomberg Tax), examined the broader meaning of decluttering, political will and key areas for reform. Maria Elena Scoppio (DG TAXUD) discussed the European Commission’s efforts to streamline direct and indirect tax rules. MEP Michalis Hadjipantela (EPP, Cyprus) presented his draft report on simpler tax rules, questioning the effectiveness of DAC6 data and pushing for more practical, competitiveness-driven reforms. Johan Langerock (Advisor to the Greens/EFA) warned against simplification being used as a cover for deregulation and advocated for a common EU framework on tax incentives and the exploration of a European tax agency. Representing the tax profession, Christian Böke (DStV) likened tax decluttering to Marie Kondo’s method, calling for fewer overlapping rules, clearer reporting priorities and more automation. The second panel, moderated by Elodie Lamer (Tax Notes), focused on the complexities of the Directive on Administrative Cooperation (DAC). Henrik Paulander (DG TAXUD) gave updates on a potential DAC10, emphasising simplification, better information use and stakeholder consultation. Philippe Vanclooster (ITAA) supported the DAC's objectives but criticized the growing compliance burden, especially under DAC6. He called for essential-only reporting and the establishment of minimum thresholds. Pieter Baert (European Parliamentary Research Service) highlighted strong parliamentary backing for DACs, while acknowledging the difficulty in simplifying DAC6 without undermining its purpose. The panel also discussed issues like professional privilege, domestic bank secrecy and the possible integration of the UNSHELL proposal into DAC6. The conference can be watched again online here.
European Commission sets out an International Digital Strategy
The European Commission published on Thursday 5 June a new EU International Digital Strategy, outlining a joint vision for the EU’s external digital action. The Strategy aims to deepen digital cooperation worldwide while boosting EU competitiveness in key technologies like AI. It sets out three core objectives: - expanding international digital partnerships through a new Digital Partnership Network; - deploying an EU Tech Business Offer combining public-private investments in AI, cybersecurity, and trusted infrastructure; and - strengthening global digital governance based on EU values. Priority areas of cooperation include secure digital infrastructure, emerging technologies such as 5G/6G and quantum, rights-respecting digital governance, enhanced cybersecurity, mutual recognition of digital identities and safe online platforms supporting democracy and privacy. It also underscores the importance of supporting partner countries in their digital transitions to foster global resilience and inclusive growth.
FISC workshop on the taxation of the EU financial sector
On Tuesday 3 June, the FISC Subcommittee held a workshop on the taxation of the EU financial sector, featuring two experts from the WIFO institute, Atanas Pekanov and Margit Schratzenstaller, who presented an upcoming study on the topic. The workshop served as an introductory debate ahead of an own-initiative report to be drafted by MEP Matthias Ecke (S&D, Germany). During the session, the experts highlighted the significant costs caused by fragmentation due to different taxation regimes in the financial sector, particularly concerning various VAT exemption systems, financial transaction taxes (FTTs), bank levies and new forms of windfall profit taxation. They provided a comprehensive overview of existing financial sector tax measures across the EU and other jurisdictions. The case was made for progressing towards greater harmonisation and coordination of these taxation measures within the EU, though with caution. Experts emphasised the need for financial sector taxes to have the broadest possible base to minimise avoidance and profit shifting, to be applied at low rates and to remain temporary, given the current limited evidence on their potential effects. MEPs expressed concerns that some financial sector taxes might be passed on to consumers. Doubts were also raised about the political willingness to achieve full harmonisation, leading to support for a step-by-step approach to advance on these issues, a view shared by the panel. The need to address new challenges like cryptocurrencies was also highlighted. All presentations can be accessed here.
Negotiations resume on the BEFIT opinion in the European Parliament
On Wednesday 4 June, the ECON Committee discussed its draft non-binding opinion on the Business in Europe: Framework for Income Taxation (BEFIT). The discussion generally showed a broad support for the Commission's proposal but diverging views on the extent of tax harmonisation needed. Rapporteur MEP Evelyn Regner (S&D, Austria) emphasized that BEFIT is not merely a tax file but a strategic move toward EU integration and fairness, offering a transparent and consistent method for calculating income tax for large cross-border business groups. She highlighted the need to reduce tax fragmentation, which distorts competition and increases compliance costs, and stressed that a harmonised framework is essential for deeper cross-border integration. Supporting the proposal, she proposed key enhancements: lowering the revenue threshold to €40 million post-transition, tightening anti-profit shifting rules, revising depreciation rules to prevent base erosion, prioritising input-based incentives and replacing the transitional apportionment method after 2035 with a factor-based formula reflecting labour, assets, and sales. Political groups have until 12 June to table their amendments, before a vote in Committee scheduled for September.
OECD publishes consolidated text of the Common Reporting Standard
The OECD published on Monday 2 June an unofficial consolidated text of the Common Reporting Standard (CRS), incorporating the amendments made in August 2022, resulting from a comprehensive review of the Standard. The Standard calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. As a result of the amendments, the scope of the CRS has been expanded to include specific electronic money products and central bank digital currencies. Further revisions have been made to ensure that indirect investments in crypto assets, through derivatives and investment vehicles, are now subject to the CRS. In addition, amendments have been made to strengthen the due diligence and reporting requirements and to provide a carve out for genuine non-profit organisations.
IMCO hearing on the Single Market Strategy on 25 June
On Wednesday 25 June, from 10:30 to 12:30, the IMCO Committee will host in the European Parliament a public hearing on the European Commission’s newly adopted Single Market Strategy. Bringing together high-level Commission officials, academic experts and business representatives, the event will examine key measures to modernise governance, remove cross-border barriers, and enhance implementation across Member States. The hearing will feature a keynote address by Professor Mario Monti, former Prime Minister of Italy and renowned expert on EU integration. Panel discussions will focus on completing the Single Market — particularly the free movement of goods and services —and improving enforcement to create a level playing field for compliant companies and empowered consumers. Addressing challenges such as regulatory fragmentation and global trade tensions, the hearing aims to assess the state of play and strategic actions necessary to ensure the Single Market remains a cornerstone of EU growth. Speakers will feature Hubert Gambs (DG GROW European Commission), Sophia Zakari (SMEunited), Patrycja Gautier (BEUC), Stancikas Alvydas (DG GROW European Commission). Closing remarks will be delivered by IMCO Chair MEP Anna Cavazzini. The detailed programme is available here.
