ETAF proposes targeted simplifications to EU direct tax rules in Tax Omnibus response
On 30 March 2026, the ETAF submitted its response to the European Commission’s public consultation on the forthcoming Tax Omnibus initiative, a simplification package expected to amend several key EU direct tax Directives, including the Anti-Tax Avoidance Directive (ATAD), the Interest and Royalties Directive (IRD), the Parent-Subsidiary Directive (PSD), the Tax Merger Directive (TMD), and the Tax Dispute Resolution Mechanisms Directive (DRM Directive). ETAF welcomes the initiative as an opportunity to simplify the EU’s direct tax framework and reduce compliance burdens for businesses, in line with the Commission’s broader objective of improving competitiveness, while preserving the underlying anti-avoidance objectives of the Directives. In its statement, ETAF sets out a number of targeted recommendations across all five Directives, guided by consistent principles of reducing fragmentation, alleviating disproportionate burdens on SMEs, eliminating overlaps with the Pillar Two Directive, and enhancing procedural efficiency. In particular, the response highlights the need for more uniform implementation of ATAD rules, including through reduced optionality, as well as measures to address instances of double taxation arising from the interaction between ATAD provisions and the Pillar Two framework. It also calls for greater alignment between the IRD and PSD, simplification of documentation and eligibility requirements, and improvements to dispute resolution procedures under the DRM Directive, including clearer definitions, streamlined filing obligations, and increased digitalisation. Overall, ETAF emphasises the importance of ensuring that the EU direct tax framework remains coherent, proportionate and fit for purpose in a changing legal and economic environment.
ECON committee submits extensive amendments on EU financial sector tax framework
Members of the European Parliament’s Committee on Economic and Monetary Affairs (ECON) have submitted more than 200 amendments to a draft report on establishing a coherent tax framework for the EU’s financial sector. The amendments reflect a broad range of political positions on the future design of taxation in the sector, including the treatment of VAT, the role of EU-level measures and the balance between competitiveness and fair contribution. In the amendments, EPP members submitted more than half of the proposals, largely supporting the existing VAT exemption for financial services and expressing scepticism towards the introduction of an EU-wide financial transaction tax and new sector-wide taxes. In amendments tabled by the Greens group, stronger measures on anti-avoidance, transparency and minimum taxation are proposed, alongside a more explicit recognition of distortions linked to the current VAT exemption. Amendments from Renew members focus on mapping existing national levies, assessing their economic impact and improving withholding tax procedures, while a set of amendments by S&D members highlights the need for a more evidence-based approach to tax design and its effects on consumers and market behaviour, including concerns related to outward investment flows. In further amendments, a group of PfE members underline concerns regarding EU-level intervention, stressing that taxation remains primarily a national competence and cautioning against using fragmentation as a justification for further harmonisation. ECON members are expected to discuss the amendments on 16 April 2026, with a committee vote on the draft report scheduled for 5 May 2026 and a plenary vote expected in June 2026.
EU tax revenues increase in 2024, with labour taxes remaining dominant
On 31 March 2026, the European Commission published updated data showing that tax revenues across the EU-27 rebounded in 2024 following a decade-low level in 2023. Total tax revenues reached €7.1 trillion, marking a 5.6% increase compared to the previous year, although the overall tax-to-GDP ratio rose only slightly, from 39.0% to 39.4%, due to continued nominal GDP growth. The composition of revenues remained broadly stable, with labour taxes accounting for the largest share at 51.5%, followed by consumption taxes (26.8%) and capital taxes (21.6%), the latter reflecting comparatively weaker growth. Significant differences persist across Member States, with the highest tax-to-GDP ratios recorded in Denmark, France and Austria, and the lowest in Ireland, Romania and Malta. The data, compiled by the Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD), provides an overview of taxation trends across the EU and feeds into broader policy monitoring, including the European Semester.
SAVE THE DATE: Virtual ETAF Conference on 7 May 2026
EPPO advances investigations into large-scale VAT fraud schemes in Spain and Germany
The European Public Prosecutor’s Office (EPPO) has recently taken further action in two major VAT fraud investigations involving cross-border schemes in Spain and Germany. In Spain, EPPO detained multiple suspects in connection with a large-scale VAT fraud scheme linked to the importation of alcohol from other EU Member States, exploiting the VAT exemption applicable to intra-EU transactions. According to the investigation, goods were routed through tax warehouses and acquired by so-called “missing traders” who failed to remit VAT, with the products subsequently sold through chains of companies using false invoicing, resulting in significant losses to public finances. In Germany, EPPO has brought additional charges in its ongoing “Water into Wine” investigation into VAT fraud involving the sale of diesel, where chemically modified fuels were misdeclared and traded through complex cross-border structures to evade both VAT and excise duties. The scheme is estimated to have caused substantial losses, including unpaid VAT and excise revenues, and involved multiple jurisdictions and coordinated enforcement actions. Together, the cases highlight the continued vulnerability of EU tax systems to sophisticated cross-border fraud schemes and the importance of enhanced administrative cooperation and enforcement at EU level.
Global Forum highlights role of tax transparency in mobilising domestic resources
On 25 March 2026, the Global Forum on Transparency and Exchange of Information for Tax Purposes contributed to a high-level panel on financing for sustainable development, held in the framework of the 2026 OECD Global Anti-corruption and Integrity Forum. The session focused on the role of tackling illicit financial flows in enhancing domestic resource mobilisation, particularly in a context of declining private capital flows to developing countries, rising debt levels and reduced official development assistance. During the discussion, the new Head of the Global Forum, Maria José Garde, emphasised the importance of international tax transparency standards, including the exchange of information, in strengthening tax systems and supporting revenue collection. She noted that the implementation of these standards across the Global Forum’s 173 jurisdictions has contributed to the identification of at least €135 billion in additional tax revenues since 2009, including €48 billion in developing countries. The panel also explored the challenges of addressing illicit financial flows across different national contexts and highlighted the need for coordinated policy approaches to improve tax compliance and support sustainable development objectives.
