New EU guidance to strengthen customs-business cooperation against illicit trade
On 14 April 2026, the European Commission published new non-binding guidance on enhancing cooperation between customs authorities and businesses to combat illicit trade, including drug trafficking and organised crime. Titled “AEO-Customs Cooperation to Detect, Report and React to Suspicious Activities”, the guidance builds on Authorised Economic Operator (AEO) frameworks while encouraging broader participation from all economic operators. It promotes information sharing, dedicated 24/7 contact points for rapid reporting, and secure whistleblowing mechanisms. Although non-binding, it is intended to inform the forthcoming legal framework under the Union Customs Code, with a view to strengthening transparency and risk detection in EU trade flows.
ECJ rules that national taxes must not undermine the EU ETS by neutralising free emission allowances
On 16 April 2026, in its judgment in Case C-519/24, the ECJ clarified the limits on Member States’ power to tax greenhouse gas emission allowances under Directive 2003/87/EC (EU ETS). The case concerned Hungarian legislation imposing a tax on CO₂ emissions on operators receiving free allowances, including with retroactive effect. The Court held that while Member States retain fiscal competence in this area, taxes must not undermine the EU ETS. A tax that neutralises the economic value of free allowances removes the incentive to reduce emissions or invest in cleaner technologies, contrary to the objectives of competitiveness, carbon leakage prevention and cost-effective emissions reduction. The Court noted that free allocation rules are fully harmonised at EU level; national measures that eliminate the incentive mechanisms underpinning the ETS are therefore precluded under EU law.
European Commission proposes coordinated EU approach to global customs standards
On 14 April 2026, the European Commission published a proposal for a Council Decision establishing the EU position within the World Customs Organization’s (WCO) Technical Committees on Customs Valuation and Rules of Origin. The proposal aims to ensure a consistent EU approach to technical decisions influencing the interpretation of the Union Customs Code, in particular goods valuation and rules of origin. Although WCO guidance instruments are not formally binding, they shape how customs rules are applied across Member States. The framework would allow the EU to define its positions in advance, strengthening legal certainty, uniform application and the Union’s financial interests. It also aims to improve Commission-Council coordination on WCO committee work. The Decision would apply until end 2030.
European Commission publishes study on wealth taxation, including net wealth, capital and exit taxes
On 15 April 2026, the European Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD) published a two-volume study on wealth taxation, covering net wealth, capital and exit taxes, in the context of ongoing OECD, G20 and UN discussions. Volume 1 covers five categories of wealth-related taxes, mapping existing regimes across EU Member States and identifying gaps in evidence, including on the mobility of ultra-high-net-worth individuals. Volume 2 presents case studies from Austria, France, Germany, Spain, Norway, Switzerland, and Colombia, illustrating that revenue and equity outcomes depend significantly on tax design and taxpayer behaviour. The study finds wealth taxes have generally not been a major revenue source, with tax gaps linked to exemptions, reliefs and compliance challenges. It underlines the importance of information exchange, asset registration and digitalisation in strengthening enforcement.
European Parliament study proposes an optional “28th tax regime” to simplify corporate taxation across the Single Market
On 10 April 2026, a study was published by the European Parliament at the request of FISC, examining the feasibility of an optional “28th tax regime” at EU level to reduce cross-border tax complexity. The study was subsequently discussed on 16 April by FISC. It proposes a parallel corporate tax framework alongside national systems, focusing on targeted coordination rather than full harmonisation. Key elements include a common corporate tax base with limited adjustments, cross-border loss relief through temporary deferral, a possible one-stop-shop for withholding tax, harmonised R&D incentives, common depreciation approaches, and simplified transfer pricing through safe harbours. The study’s authors highlighted a modular “building-block” approach emphasising flexibility and fiscal sovereignty. MEPs acknowledged tax fragmentation as a key obstacle for businesses in the Single Market, while raising questions on political feasibility and unanimity constraints in Council.
MEPs debate amendments on EU financial sector tax framework
On 16 April 2026, the European Parliament’s Subcommittee on Tax Matters (FISC) held a debate on proposed amendments to the draft own-initiative report on a coherent tax framework for the EU financial sector. Rapporteur Matthias Ecke (S&D, Germany) called for greater convergence, reduced administrative burdens and enhanced legal certainty. MEPs held differing views: several, including Luděk Niedermayer (EPP, Czechia), argued investment constraints are the primary issue and warned against changes to VAT rules or the revival of a Financial Transaction Tax (FTT), citing negative impacts on the EU financial sector’s competitiveness. Discussions also reflected concerns about balancing tax coordination with national sovereignty and avoiding increased compliance costs. The report is scheduled for plenary vote on 15 June 2026.
EU Joint Research Centre publication analyses bilateral tax competition in double tax treaties
On 15 April 2026, the European Commission’s Joint Research Centre (JRC) published a scientific article examining bilateral tax competition in withholding tax rates under double tax treaties between developed and developing countries. The paper analyses trends across more than 900 tax treaties, documenting a steady decline in average withholding tax rates since 1990. It attributes this to treaty-embedded tax competition, whereby countries negotiate reduced rates for investors from specific partner jurisdictions. Focusing on four types of withholding taxes on passive income, the empirical analysis finds a positive relationship in rates agreed by developing countries vis-a-vis the same origin country, suggesting treaty provisions are shaped by bilateral competitive dynamics.
European Parliament examines study on tobacco excise taxation and its impact on consumption and revenues
On 16 April 2026, the European Parliament’s Subcommittee on Tax Matters (FISC) discussed a study on excise duties on tobacco products, examining the expected impact of a revision of the Tobacco Taxation Directive (TTD) across several Member States. Researchers from the Vienna Institute for International Economic Studies found that higher excise duties are likely to reduce tobacco consumption while increasing public revenues. The analysis highlighted the role of excise harmonisation in reducing price differentials between Member States, limiting cross-border tobacco shopping. Discussions also covered potential indexation mechanisms to align minimum excise rates with inflation and the treatment of emerging products such as heated tobacco and e-liquids. MEPs broadly supported the findings while raising questions on behavioural effects, cross-border purchasing, illicit trade and fiscal implications for Member States.
OECD report highlights progress on global tax co-operation and G20 priorities
On 16 April 2026, the OECD published its Secretary-General’s Tax Report to G20 Finance Ministers and Central Bank Governors, outlining recent developments in international tax co-operation ahead of the G20 meeting under the United States Presidency. The report covers progress on BEPS minimum standards, the rollout of the global minimum tax (Pillar Two), and tax transparency initiatives. It highlights efforts to strengthen information exchange, improve tax certainty and support developing countries’ domestic resource mobilisation. The report also underlines the importance of coordinated implementation to ensure the effectiveness of agreed international standards, including ongoing capacity-building activities led by the OECD.
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