European Commission unveils the tax simplification package
On 24 June 2026, the European Commission published its Tax Simplification Package, comprising two legislative proposals: a Taxation Omnibus and a recast of the Directive on Administrative Cooperation in the field of taxation (DAC). The package aims to reduce compliance costs for businesses by an estimated €7.9 billion while maintaining safeguards against tax avoidance. The Taxation Omnibus proposes targeted amendments to six existing EU direct tax directives: it removes minimum holding requirements for withholding tax exemptions under the Parent-Subsidiary Directive and the Interest and Royalties Directive, introduces a new EU-wide R&D allowance under ATAD, deletes the imported hybrid mismatch rule, introduces a Pillar Two carve-out and an SME exemption from controlled foreign company rules, and makes the 30% EBITDA cap mandatory for the interest limitation rule. The DAC recast consolidates the original directive and its eight subsequent amendments into a single legal act. On DAC6, it deletes Category A generic hallmarks and extends the reporting deadline from 30 to 90 days. Regarding DAC7, it is expected to raise the reporting threshold for occasional sellers. It also introduces simplified notifications for country-by-country reporting and for Pillar Two Top-up Tax Information Returns, as well as a centralised taxpayer identification number verification tool. Both proposals will now be examined by the Council under the special legislative procedure.
ETAF provides feedback to the European Commission on the EU Inc. proposal
On 25 June 2026, ETAF submitted its feedback to the European Commission on the proposal for a Regulation establishing a 28th regime corporate legal framework (EU Inc.) While ETAF sees merit in the objective of creating a simplified European corporate framework to support businesses operating across multiple Member States, it warned that several elements of the proposal require further assessment and refinement. ETAF raised concerns that the fully online incorporation procedure, the 48-hour registration window, the absence of minimum capital requirements and the company-controlled digital share register could expose EU Inc. to risks of abuse and regulatory arbitrage. ETAF therefore recommended introducing mandatory EU-wide AML identity checks before registration, ensuring independent oversight of digital share transfers, and replacing the fixed 48-hour deadline with registration “without further delay” or a deadline measured in working days. ETAF also called for clearer safeguards in the simplified winding-up procedure, including stronger creditor protection and a clearer framework for the involvement of regulated professionals. In addition, ETAF recommended reconsidering the EU employee stock option tax provisions and clarifying the delimitation between EU and national law to avoid creating 27 different variants of EU Inc.
European Commission clarifies VAT treatment of €3 customs duty on low-value imports
On 16 June 2026, the European Commission published an addendum to the VAT e-commerce explanatory notes of 30 July 2021 clarifying the VAT treatment of the temporary €3 customs duty on distance sales of imported goods not exceeding €150, which will apply from 1 July 2026 until 30 June 2028. The addendum explains that, where the Import One Stop Shop (IOSS) is used, no VAT is due on the €3 customs duty at importation and the duty should not be included in the taxable amount of the distance sale, as it becomes due only when the customs declaration is accepted. By contrast, where goods are imported under the special arrangements or the standard import procedure, import VAT is due and the €3 customs duty must form part of the taxable amount on which VAT is charged. The Commission also clarifies that the announced Union handling fee, expected to apply from November 2026 at the earliest, will be outside the scope of VAT and will not form part of the import VAT taxable amount.
Council removes tax provisions from the pan-European personal pension product proposal
On 24 June 2026, the Council of the EU agreed its negotiating position on the review of the Regulation establishing a pan-European personal pension product (PEPP) proposal, with the aim of making the product more attractive and easier to distribute across the EU. The Council supported measures to simplify the framework, including removing the requirement for mandatory investment advice for basic PEPPs and the current 1% fee cap, while maintaining consumer protection for tailored products. From a tax perspective, however, the Council removed the European Commission’s proposed provisions on the tax treatment of PEPPs from its negotiating mandate. It also excluded the proposed value-for-money framework and the extension of EU-level supervisory powers, while preserving measures to facilitate employer contributions and introducing a strengthened product oversight and governance regime. The Council’s position will serve as the basis for negotiations with the European Parliament on the final text.
EU-US tariff commitments confirmed, bringing customs duty changes for EU businesses
On 25 June 2026, the Council of the EU formally adopted two Regulations implementing the tariff-related commitments set out in the EU-US Joint Statement of 21 August 2025: a main Regulation eliminating remaining customs duties on US industrial goods and granting preferential market access for certain US seafood and non-sensitive agricultural products, and a Lobster Regulation extending the suspension of duties on lobster imports from all countries on a most favoured nation basis. The Regulations remove the remaining EU customs duties on US industrial goods and introduce preferential access for certain US seafood and non-sensitive agricultural products through tariff rate quotas and reduced tariffs, with direct implications for customs duty collection and compliance obligations for EU businesses trading with the United States. The regulations also introduce reinforced safeguard mechanisms that enable the European Commission to quickly suspend tariff preferences when the US does not respect its commitments. The Commission will be required to present a comprehensive assessment of the impact on EU-US trade flows, tariff revenue and economic effects, including on SMEs, by 30 June 2029. Both regulations will enter into force on the day following their publication in the Official Journal, with the lobster import regulation applying retroactively from 1 August 2025.
MEPs debate stronger data-sharing and seller liability to combat VAT fraud
On 24 and 25 June 2026, the European Parliament held two separate discussions on VAT fraud. The CONT Committee discussed a draft report by Ondřej Knotek (PfE, Czechia) highlighting that the EU's VAT compliance gap amounts to around €128 billion annually, calling for stronger cross-border cooperation, real-time data exchange, and the use of artificial intelligence and advanced analytics by Eurofisc to detect suspicious transaction chains. The following day, the FISC Subcommittee heard from Laura Kövesi (EPPO), Petr Klement (OLAF) and Marina Marinelić (Eurofisc), with Ms Kövesi warning that organised crime has turned VAT fraud into one of its most profitable industries and that some large e-commerce platforms never declare VAT despite being legally obliged to do so, and Mr Klement argued that introducing seller liability for VAT would remove the key feature enabling a large share of fraud. Both discussions took place against the backdrop of a European implementation assessment published by EPRS on 22 June 2026, which found that the reverse charge mechanism remains effective in fraud-prone sectors but is impeded by diverging national rules, and recommended extending it beyond its December 2026 expiry date in line with the ViDA implementation timeline.
European Parliament raises digital tax, ultra-wealth taxation and Pillar Two concerns after Paris mission
Following a two-day mission to Paris, the Chair of the European Parliament's Subcommittee on Tax Matters, Pasquale Tridico (The Left, Italy), issued a statement on behalf of the delegation calling for action on three fronts. First, Mr Tridico called on the Commission to put forward a proposal for an EU-wide digital services tax, noting that France introduced its own digital services tax in 2019 as a transitional measure in the absence of a global agreement on the reallocation of taxing rights, and that discussions at global level remain constructive with the US committed to finding a solution. Second, the delegation highlighted that more than 10,000 high-income French residents are legally not paying personal income tax in France and called on France to take the lead within the European Council to establish a harmonised minimum tax on ultra-high-net-worth individuals at EU level. Third, Mr Tridico noted that the 'Side-by-Side' package on a 15% minimum effective corporate tax rate is raising concerns in France regarding the level playing field between EU and US companies, and called for simplification of Pillar Two as well as close monitoring of the agreement's implementation. The delegation comprised MEPs from five political groups: Pasquale Tridico (The Left, Italy), Kinga Kollár (EPP, Hungary), Eero Heinäluoma (S&D, Finland), Pierre Pimpie (PfE, France) and Pascal Canfin (Renew, France).
New study assesses revenue potential and policy options for an EU digital services tax
On 22 June 2026, the European Parliament's Committee on Budgets published a briefing examining whether a digital services tax (DST) could become a new EU own resource. The briefing notes that the stalled implementation of OECD Pillar One and ongoing UN negotiations expected to last until 2027 are increasing pressure for action at EU level, while divergent national DSTs already in place in several Member States, including France, Italy, Spain and Austria, are contributing to fragmentation in the Single Market. According to the briefing's estimates, an EU-wide DST applied to large multinationals could generate substantial revenues for the EU budget by 2028, with B2C e-commerce accounting for the largest share. The briefing identifies four main policy options: an immediate, temporary EU DST pending a global agreement; a coordinated framework that replaces existing national measures; a phased approach aligned with international developments; or a hybrid solution that combines elements of both.
European Commission research finds inheritance taxation widely underused as a fiscal tool
The European Commission's Joint Research Centre (JRC) published a policy brief examining the revenue potential of inheritance taxation in France, Germany, Italy and Spain in the context of demographic ageing. The brief finds that inherited wealth already accounts for 50 to 60% of Europe's total private wealth stock, yet inheritance taxes raise only around 0.5% of total tax revenue on average across EU Member States, a gap reflecting narrow tax bases, generous exemptions and wide scope for tax planning. With inheritance flows projected to rise sharply in all four countries over the coming decades due to demographic change, the brief argues that inheritance taxation sits at the intersection of two policy concerns: fiscal sustainability and the distribution of wealth across generations. It concludes that inheritance taxation is an underused fiscal instrument that could make a meaningful contribution to bolstering public revenues, even if it cannot on its own compensate for the projected costs of an ageing population. The brief recommends that inheritance tax reform focus primarily on tax base design and only secondarily on rates, and be communicated explicitly as a tax on concentrated high-wealth transfers rather than a tax on the broad middle class.
