On Tuesday 3 June 2025, the European Tax Adviser Federation (ETAF) hosted a conference in Brussels, on the theme "Decluttering without diluting the EU tax system". The event drew a full house of EU officials, experts and tax advisers, with an additional 1 600 participants joining online.
In his opening remarks, ETAF President Philippe Arraou underscored that the objective of "decluttering" the EU tax system should not be deregulation, but rather the establishment of a smarter, clearer, consistent and balanced framework, which is built for the future. "Compliance should not be an endurance sport”, he said.
Exploring the big picture of tax decluttering
The first panel, moderated by Saim Saeed, Tax journalist at Bloomberg Tax, explored the big picture, the meaning and scope of decluttering, political willingness and priority areas for simplification.
Maria Elena Scoppio, Director for Indirect Taxation and Tax Administration at DG TAXUD of the European Commission, outlined the Commission’s ongoing efforts to simplify tax legislation across various areas, including direct and indirect taxation. She highlighted potential simplifications in indirect taxation, such as a one-stop shop for alcoholic beverages and tobacco products and, streamlining the CESOP system for payment service providers to report only to their home state. "The wider objective of the Commission is to try to simplify, to make it easier, but not to eliminate what we already have, because you would soon realise that without certain pieces of legislation you would only have chaos”, she added.
MEP Michalis Hadjipantela (EPP, Cyprus) updated the audience on the ongoing negotiations in the European Parliament on his draft report “The role of simple tax rules and tax fragmentation in European competitiveness”. He raised concerns about the practical utility of collected data, particularly from DAC6, questioning whether it effectively combats tax avoidance or leads to a "waste of money" if not used. The report aims to simplify taxation, enhance competitiveness and tackle tax avoidance, though significant discussions remain on digital taxation, the re-assessment of Pillar Two and tax incentives for disadvantaged regions, he explained.
Johan Langerock, Advisor to ECON and FISC Committees for the Greens/EFA Group in the European Parliament, outlined his group’s stance on the report as well as on the broader decluttering effort of the European Commission. “We will never allow, as political group, that simplification means deregulation; that simplification is another word for a new race to the bottom. This is what we fully oppose. What you can, however, find in the Greens is a true ally in simplifying tax systems”, he said. The Greens support the establishment by the European Commission of a framework with clear criteria to guide Member States in designing their tax incentives and exploring the idea of a European tax agency as a potential solution to streamline processes and foster a common interpretation of rules across Member States.
Christian Böke, Certified public accountant and tax Adviser (DStV) and President of the Tax Adviser Association of Lower Saxony and Saxony-Anhalt, likened tax decluttering to Marie Kondo's tidying method, advocating for a critical review of existing directives. He highlighted how increasing complexity, often driven by fear of tax avoidance, burdens SMEs, citing Germany's capital income taxation as an example where simplification was reversed into extreme complexity. Christian Böke called for a reduction in redundant reporting, clear prioritisation and the abolition of overlapping rules. He also stressed the importance of demonstrating clear benefits before introducing new reporting obligations and using technology like AI to automate processes.
Diving deep into the DAC
The second panel, moderated by Elodie Lamer, Tax journalist at Tax Notes, focused on the Directive on Administrative Cooperation (DAC), often cited as the most complex area of EU tax law.
Henrik Paulander, Head of Sector Administrative Cooperation at DG TAXUD of the European Commission, gave an update on the ongoing DAC evaluation and outlined the prospect for a DAC10 proposal. The primary objectives are to simplify procedures for both businesses and tax administrations, clarify unclear issues and improve the availability and utility of information, he said. Mr Paulander emphasised the importance of stakeholder consultations and highlighted the constraint of many DACs being based on OECD agreements, limiting the scope for unilateral EU changes. In particular, he acknowledged the complexity of DAC6 and the diverse stakeholders feedback, ranging from calls for abolition to no changes at all. He confirmed the Commission's openness to clarifying the text, removing hallmarks and issuing non-binding guidelines, while noting the challenge of interpreting hallmarks use statistics to determine either effectiveness or over-reporting.
Philippe Vanclooster, Certified tax adviser and member of ITAA's Council, recognised the positive initial impact of the DACs in fostering a mentality change against aggressive tax planning. However, he warned about the increasing burden on intermediaries and businesses due to the "tsunami" of information exchange requirements, advocating for simplification and a focus on the core purpose of EU laws to avoid overcomplication and potential negative consequences like threatening legal privilege. Philippe Vanclooster expressed strong discontent with DAC6, asserting that it paradoxically treats legal tax arrangements more severely than illegal ones. He proposed focusing on essential reporting and establishing minimum thresholds for certain DACs.
For his part, Pieter Baert, Policy Analyst at the European Parliamentary Research Service, highlighted the European Parliament's consistent and nearly unanimous support for the DAC directives over the years, viewing administrative cooperation as crucial. He further acknowledged that DAC6’s broadly defined terms and hallmarks, while causing concern, were intentionally designed to capture emerging tax avoidance risks beyond existing anti-avoidance rules. He further stated that simplifying DAC6 will, in his view, be challenging as it would directly impact its core objective.
The discussion also addressed the issue of domestic bank secrecy, clarifications about professional privilege and the introduction of an EU Tax Identification Number (TIN), three elements that are under consideration and could be in the DAC10 proposal. It also tackled the recent idea of the Polish Presidency of the Council of the EU to integrate the elements of the UNSHELL proposal into the DAC6, for which the Commission said it needs more time to analyse.
“The risk when we get a new DAC is that everybody wants to have something in it. In the end, you need to make some choices, and we'll see which choices we will make this time for DAC10. We will try to include the things that are most relevant. The emphasis right now is on simplification. Let's be clear about that”, Henrik Paulander concluded.
Notes to editors:
Our event can be watched again online here: https://www.youtube.com/watch?v=W37tpWFs0Fk
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