Key takeaways from President von der Leyen’s State of the Union address
On 10 September 2025, European Commission President Ursula von der Leyen delivered her annual State of the Union address before the European Parliament, focusing mainly on foreign affairs, including the war in Ukraine, the situation in Gaza and trade relations with the United States. She notably praised the newly concluded trade deal with Washington as the “best agreement” to avert a trade war and underlined the importance of cutting red tape for businesses in Europe. Ursula von der Leyen outlined several upcoming initiatives, such as a Single Market Roadmap to 2028, an Omnibus package on digitalisation, a 28th regime for innovative companies, a European Innovation Act, an EU Cloud and AI Development Act as well as a skills portability initiative. Many MEPs voiced disappointment, particularly over concessions in the US trade agreement and the EU’s muted stance on Gaza. In response, far-right and far-left groups reportedly filed no-confidence motions, setting the stage for a new debate and no-confidence vote in October. The full debate can be watched again here and the full speech here.
European Commission remains cautious on digital taxation
On 10 September 2025, MEPs debated with European Commissioner for Justice Michael McGrath on the taxation of large digital platforms and the stalled OECD negotiations. Speaking on behalf of the European Commission, Mr McGrath reaffirmed the institution’s commitment to multilateralism and the OECD Two-Pillar framework, stressing that alternatives would only be considered if talks failed, at which point Parliament and Member States would be consulted. He welcomed the recent G7 statement and potential coexistence with the US minimum tax regime, calling it a step toward less tax avoidance and a more stable landscape. He said the Commission had no current proposals, so no impact assessment could be made on a digital tax. While Mr McGrath insisted it was premature to discuss unilateral measures, many MEPs — particularly from S&D, Greens, Renew and EPP — highlighted tax justice and sovereignty, urging the EU to act independently if necessary. Several voiced distrust of the US, criticising the Commission for negotiating a poor US-EU trade deal and warning against reliance on Washington’s approval.
European Commission to organise a conference on follow-up to Draghi report on 16 September
On 16 September 2025, President Ursula von der Leyen and Professor Mario Draghi will open a high-level conference entitled “One Year After the Draghi Report”. The high-level event will review the European Commission's progress in implementing the recommendations set out twelve months ago. Their keynote speeches will be broadcast live here. In particular, the Commission is expected to highlight its achievements on closing the innovation gap, with the launch of AI gigafactories, a European quantum strategy, the start-up and scale-up strategy, and the Choose Europe initiative to attract talented scientists, researchers, academics and highly skilled professionals to Europe. Other progress that should be addressed include improving access to finance, by advancing work on the Savings and Investment Union, and making life easier for businesses, with the adoption of six simplification Omnibus packages and the new Single Market Strategy.
FISC Subcommittee invites national parliaments for an exchange on digital taxation
The FISC Subcommittee of the European Parliament will hold an Inter-parliamentary Committee Meeting on digital taxation on 16 October 2025 from 09:45 to 12:30 at the European Parliament to discuss and exchange experiences on digital taxation at national and international (OECD/G7) level. This meeting will bring together representatives from the European Parliament, national parliaments, and representatives from national tax administrations and will be divided into two panels. The first one will be dedicated to a discussion on the reasons behind the implementation (or not) of a digital services tax (DST), the choice of the tax base and the rate applied. The second panel will explore practical challenges such as tax collection difficulties, risks of fraud, and the revenues generated. The draft agenda can be found here and the invitation letter here.
OECD updates BEPS Action 5 Transparency Framework on tax rulings
The OECD Inclusive Framework has revised the BEPS Action 5 Transparency Framework on tax rulings, clarifying definitions, scope, and timelines for tax rulings. In a report released on 8 September 2025, the OECD detailed revisions made after reviewing the framework’s effectiveness, including a new XML schema and user guide to support the spontaneous exchange of rulings starting 1 January 2027. Under the clarified definition of past rulings, the spontaneous exchange of information requirements now only apply to future rulings, eliminating the system for past rulings introduced in the 2015 Action 5 report. The report specifies that exchanges on future rulings must occur within six months of issuance and jurisdictions must implement mechanisms to ensure timely sharing. It also introduces an updated peer review methodology for assessing compliance with the Action 5 standard and issuing peer review reports.
OECD Tax Policy Reforms report 2025
The OECD’s Tax Policy Reforms 2025 report, published on 11 September 2025 and covering 86 jurisdictions, shows that in 2024 many governments raised social security contributions and other taxes to address rising health costs and population ageing, while moving away from broad COVID-era relief. Instead, tax reforms increasingly focused on targeted measures, including personal income tax relief to support employment and selective incentives for sustainability. Countries also scaled back temporary VAT cuts as inflation eased, with some raising standard VAT rates, while health-related excise taxes on tobacco, alcohol and sugary drinks gained momentum. Fuel tax relief was withdrawn in favour of higher excise taxes, and carbon pricing was strengthened for a second year, with broader scope and higher rates, the report shows. Several governments also paired carbon taxes with tax incentives for green investments, such as reduced VAT on solar panels, PIT relief for sustainable transport and CIT breaks for clean technologies.
