European Commission presents 2028-2034 budget proposal
The European Commission unveiled on Wednesday 16 July a proposal for a 2 trillion € Multiannual Financial Framework (MFF) for 2028–2034, positioning it as a “fundamental redesign” of the EU budget to make it more streamlined, flexible, and impactful. The proposal emerged after fraught overnight negotiations and a delayed presentation, revealing internal tensions as each Commissioner defended their priorities. Key to the plan are three new own resources: - a Corporate Resource for Europe (CORE) levying progressive contributions from large companies with a net annual turnover of at least 100 million €; - a 15% Tobacco Excise Duty (TEDOR); and - a 2€-per-kilo top-up contribution from Member States for non-collected e-waste, based on already existing data reported by Member States to Eurostat and annually adjusted for inflation. Adjustments are also proposed for existing own resources, including higher shares from the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM), reduced customs retention rates and increased rate for non-recycled plastic packaging waste. These measures are expected to yield around 58.5 billion € annually, starting in 2028. The decision on the 2028-2034 MFF will be discussed by Member States in the Council, acting by unanimity, with the consent of the European Parliament, and where relevant – ratification by national parliaments for the revenue. In a statement, the European Parliament already warned that it has serious concerns about the proposed structure and the sufficiency of the funds and made clear it expects a robust parliamentary oversight.
European Commission launches reflection on the revamp of the EU anti-fraud architecture
On Wednesday 16 July, the European Commission announced that it has launched a “structured reflection process” for the review of the EU anti-fraud architecture to safeguard EU funds through a White paper, inviting relevant EU bodies and agencies to give their input. These anti-fraud actors include the European Court of Auditors (ECA), the European Union Agency for Criminal Justice Cooperation (Eurojust), the European Union Agency for Law Enforcement Cooperation (Europol), the European Public Prosecutor's Office (EPPO), the European Anti-Fraud Office (OLAF), the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), as well as relevant authorities in the Member States. The reflection will focus on questions related to a better collection and use of information, data sharing, strengthened access to data, the use of modern technologies (including AI), in detecting and investigating fraud, and better synergies in the use of investigative means, both criminal and administrative. It will also explore how to ensure better cooperation between different bodies, as well as an optimal use of resources and avoid duplication. The results of this review will be presented in a Commission Communication in 2026 and may be accompanied, as appropriate, by possible legislative proposals.
EU plans 72 billion € tariffs on US goods as trade tensions rise
The European Union is reportedly preparing a new round of retaliatory tariffs on US goods worth 72 billion € if no trade deal is reached, mainly targeting industrial products like aircraft, cars, and machinery, after President Trump threatened to impose a 30% tariff on EU exports starting 1 August. The EU's plan includes 65.7 billion € in industrial goods and 6.4 billion € in agricultural products such as bourbon whiskey, despite some EU countries' efforts to protect their beverage sectors. The biggest target is US aircraft and parts, worth nearly 11 billion €. The EU's list, now smaller than an earlier 95 billion € proposal, aims to rebalance trade and focuses on products where the EU has alternative suppliers or where there’s a high risk of companies moving operations. These measures need formal approval from EU countries and follow a delayed first round of tariffs on 21 billion € of US goods, postponed to allow more time for trade talks until 6 August.
European Commission proposes overhaul of Tobacco Taxation Directive
On Wednesday 16 July, the European Commission released its long-anticipated proposal to recast the 2010 Tobacco Taxation Directive, aiming to better align tobacco taxation with public health objectives and reduce disparities across Member States. The plan introduces higher EU-wide minimum tax rates for all manufactured tobacco products, including cigarettes, cigars, heated tobacco, and waterpipe tobacco, with adjustments tailored to each country's economic conditions and price levels. To discourage cross-product substitution, the proposal seeks gradual convergence of tax rates among different tobacco categories, with increases phased in over a four-year transitional period and a mid-term hike after two years. The Directive’s scope would be expanded to cover emerging products like e-cigarettes, heated tobacco, and nicotine pouches, which will now face harmonized minimum taxation. Enhanced monitoring is also proposed, with the EU’s electronic excise tracking system (EMCS) extended to raw tobacco to curb illicit trade. The legislative proposal must be agreed at unanimity by Member States. The Tobacco Excise Duty Own Resource (TEDOR), proposed as part of the new own resources package, is not legally dependent on the adoption of the recast of the Tobacco Taxation Directive, the Commission specified.
New Implementing Regulation to facilitate automatic exchange of tax information under DAC9
The European Commission recently adopted an Implementing Regulation aimed at providing the technical solution for the automatic exchange of top-up tax information returns between Member States under the Directive on Administrative Cooperation (DAC9). The new Implementing Regulation lays down a common IT schema which is based on the one developed by the OECD. This will ensure full interoperability between reporting under DAC9 and the OECD framework, thereby minimising the administrative burden on tax authorities and businesses alike, the Commission pointed out. This initiative is fully in line with the ongoing efforts to simplify and reduce administrative burden for all stakeholders involved. “The adoption of this Implementing Regulation confirms, once again, the strong commitment of all Member States to ensuring the seamless implementation of the Pillar 2 Directive”, the Commission said. The text was published in the EU Official Journal on Thursday 17 July.
European Commission adopts its updated AML blacklist after EP non-objection
The European Commission formally adopted and published on Wednesday 16 July its list of third countries deemed high‑risk for money laundering and terrorist financing as neither the European Parliament nor the Council objected to it. Algeria, Angola, Ivory Coast, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela are identified as having strategic weaknesses in their anti‑money laundering and counter‑terrorism financing frameworks. Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda and the United Arab Emirates were deemed to have made enough progress to be delisted. This update means banks and other institutions covered by the EU’s anti‑money laundering rules must apply extra scrutiny when dealing with these jurisdictions. On 9 July, MEPs reportedly rejected four resolutions aimed at blocking the updated list. Political groups were divided and failed to present a unified resolution. Before the vote, the Commission introduced an amendment to its list, committing to conclude by the end of the year the review of non‑EU countries that are not identified as being subject to calls for action or increased monitoring by the FATF, but whose membership in that international standard‑setter is suspended, implicitly referring to Russia. The updated list will enter into force beginning of August.
European Commission July tax infringement decisions
On Thursday 17 July, the European Commission issued a series of tax infringement decisions targeting several Member States for failing to comply with EU law. It launched infringement procedures by sending letters of formal notice to Cyprus for not fully transposing the Directive on VAT rates and to Italy for excluding certain non-resident self-employed persons from its flat tax regime in breach of freedom of establishment rules, as well as for discriminatory conditions of its municipal property tax and garbage tax for non-resident pensioners, violating multiple EU law provisions. The Commission also escalated several cases by issuing reasoned opinions. Belgium, Bulgaria, Greece, Spain and Romania were all called to fully transpose the Directive on VAT rates, while Bulgaria, Greece, Spain and Romania were additionally asked to fully transpose the EU VAT rules for the special SMEs scheme. Lastly, the Netherlands received a reasoned opinion for maintaining a tax levy reduction scheme that discriminates against foreign investment funds, limiting cross-border capital flows. All concerned Member States have two months to reply and address the identified issues or face possible referral to the Court of Justice of the EU, with potential financial penalties.
ECJ to rule on the legality of Pillar Two UTPR
On Thursday 17 July, Belgium’s Constitutional Court referred a case to the EU Court of Justice (ECJ) to rule on the legality of the EU’s Undertaxed Profits Rule (UTPR), a central element of the Pillar Two Directive. The referral stems from a 2024 lawsuit filed by the American Free Enterprise Chamber of Commerce (AmFree), joined by several US business groups, challenging Belgium’s implementation of the UTPR. In this case, AmFree reportedly argued that Articles 35 and 36 of Belgium’s Pillar Two law transposing the Pillar Two Directive violate rights protected under the Belgian Constitution, the European Convention on Human Rights, and the EU Charter of Fundamental Rights, including rights to property, business freedom, equality and tax territoriality. The Belgian Court therefore requested the ECJ to determine whether the UTPR conflicts with rights guaranteed by the EU Charter as well as with EU fundamental freedoms. A ruling from the ECJ is expected within 18 months.
MEPs adopt their report on simpler tax rules
On Tuesday 15 July, MEPS of the ECON Committee of the European Parliament approved by 46 votes in favour, 2 against and 11 abstentions the report, drafted by MEP Michalis Hadjipantela (EPP, Cyprus), which contains several suggestions for reforms to the tax architecture to boost competitiveness while continuing to address tax avoidance and evasion. The report notably urges the Commission to establish an EU Tax Data Hub to improve the automatic exchange of tax information and reduce administrative burden. MEPs say that tax declaration procedures for savings and investment accounts should be simplified so that more people would feel encouraged to invest in the EU’s capital markets. Moreover, the Commission is asked to assess and simplify the current VAT framework, the Directive on Administration Cooperation in Tax matters, and the Anti-Tax Avoidance Directive. Finally, MEPs call for measures to deal with the tax issues facing cross-border workers and digital nomads, as well as simplifying the R&D tax incentive schemes. This own initiative report will feed into the ongoing legislative work on legislative simplification, more particularly a dedicated Commission proposal expected in early 2026. The final vote in Plenary of the report is scheduled for 8 September 2025. The report will be made available here shortly.
FISC mission to Dublin
A delegation of MEPs from the FISC Subcommittee of the European will travel to Dublin on Tuesday 22 July for a day of exchanges on tax policies, the fight against tax avoidance and tax simplification. The delegation led by FISC Chair MEP Pasquale Tridico will meet with business representatives, including representatives of the Google group, the Meta group and Apple group. They will then have a discussion with Members of the Finance Committee and the Committee for Budgetary Oversight of the Oireachtas. The afternoon will be dedicated to exchanges with tax authorities, NGOs and academics. The objectives of the FISC delegation trip to Dublin are to better understand Irish tax policies and to have direct engagements with key policymakers, tax authorities and stakeholders on critical issues, such as aggressive tax schemes, tax avoidance or tax simplification.
