New EU rules on customs duties for low-value e-commerce imports take effect from 1 July 2026
From 1 July 2026, the customs duty exemption for e-commerce consignments valued at €150 or less entering the EU from non-EU countries ceased to apply, replaced by a temporary flat-rate customs duty of €3 per item under Regulation (EU) 2026/382. The measure is part of the broader EU Customs Reform agreed by the European Parliament and Member States on 26 March 2026, and responds to the surge in low-value imports: in 2025 alone, 5.9 billion items entered the EU in low-value packages without paying customs duties, with low-value packages now representing 97% of all imported items by volume. The European Commission, in its press release, notes that a 2025 EU-wide investigation found that over 60% of such goods do not comply with product safety requirements. Duties are collected from platforms and businesses involved in the sale and transportation of goods, not from consumers at delivery. The measure also introduces product identifiers (PIDs) to improve risk management and customs controls, applicable on a voluntary basis from 1 July 2026 and mandatory from November 2026. A separate handling fee to compensate customs authorities for processing costs will be introduced no later than 1 November 2026, with the amount to be set by delegated act. The €3 rate is a transitional measure and will be replaced from July 2028 when the EU Customs Data Hub becomes operational and standard customs tariff rates apply.
Irish Presidency Council work programme points to tax decisions expected for second half of 2026
On 1 July 2026, Ireland took over the rotating Council Presidency. Ahead of this, on 25 June 2026, it published its draft agendas for Economic and Financial Affairs Council (ECOFIN) meetings for the period from 1 July to 31 December 2026. The agendas give an early indication of the legislative milestones the Presidency intends to pursue in the field of taxation. Two key agreements are targeted: a political agreement on the tobacco taxation package at the ECOFIN meeting of 9 October 2026, comprising proposals amending the Directive on the structure and rates of excise duty applied to tobacco and a Directive as regards the general arrangements for excise duty in respect of tobacco, and a political agreement on a proposal on the recast of the Directive on Administrative Cooperation in the field of taxation (DAC) at the meeting of 11 December 2026. The October meeting will also include a review of the EU list of non-cooperative jurisdictions for tax purposes, and the Presidency has indicated readiness to progress any Commission proposals on the EU VAT framework if brought forward in time. No agreement is currently projected for the Taxation Omnibus proposal in the draft ECOFIN agendas for this period. The draft agendas remain indicative and subject to change.
General Court of the European Union rules on fictitious duty suspension arrangements and excise duty exemption refusals
On 1 July 2026, the General Court of the European Union ruled in its judgement in Case T-361/25, clarifying the conditions under which excise duty becomes chargeable during the movement of alcohol under a duty suspension arrangement and the scope of the proportionality principle in relation to excise duty exemptions. The case concerned a German chemical distributor that had supplied alcohol to customers in 2016 using a national onward transfer mechanism, whereby goods were transported directly from suppliers to customers without passing physically through the distributor's tax warehouse. On the first question, the Court ruled that Directive 2008/118/EC (General Arrangements for Excise Duty Directive) precludes national legislation providing for a legal fiction under which an authorised warehousekeeper is deemed to have received and simultaneously dispatched excise goods from its tax warehouse, thereby triggering a new duty suspension arrangement, where the goods are in fact transferred directly from suppliers to customers. On the second question, the Court ruled that Directive 92/83/EEC (Alcohol Structures Directive) precludes national legislation under which an exemption from excise duty is refused solely on the ground that the required documentation was missing or submitted out of time, where the goods were used for exempt purposes and there is no evidence of tax evasion, avoidance or fraud.
European Commission publishes study calling for reform of financial services VAT exemption
The European Commission's Directorate-General for Taxation and Customs Union (DG TAXUD) has published a comprehensive external study on the taxation of the financial sector. The study, published as a two-volume final report (Volume 1 covering the main analysis and findings, and Volume 2 covering the annexes including the stakeholder consultation synopsis and analytical methods), focuses on two main issues: the long-standing VAT exemption for financial services under article 135(1)(a)-(g) of the VAT Directive, in place since 1977, and the wide variety of national sectoral taxes applied across Member States, of which 92 different measures were identified. The study finds that the VAT exemption creates a significant hidden VAT burden, as financial institutions cannot deduct input VAT and therefore bear the cost silently, distorting business decisions and discouraging cross-border specialisation. Looking at possible reforms, the study sets out three broad approaches: updating and clarifying existing VAT rules without removing the exemption; reducing hidden VAT through expanded VAT grouping and cost-sharing arrangements while keeping the exemption in place; and more fundamental changes, such as partially or fully removing the VAT exemption or introducing a Financial Activities Tax (FAT). The study concludes that the original justification for the VAT exemption no longer holds, that the current framework causes distortions, complexity and fragmentation, and that more fundamental reform would be practically feasible, while acknowledging that any final decision will ultimately depend on political choices.
MEPs seek to strengthen EU Inc. proposal on workers' rights and anti-abuse safeguards
On 29 June 2026, the European Parliament’s Committee on Legal Affairs (JURI) published a draft report by rapporteur René Repasi on the proposed EU Inc. Regulation, seeking to strengthen the European Commission’s proposal for a harmonised 28th regime corporate legal framework. The report introduces a new article clarifying that the Regulation may not reduce workers' rights or protections, including the rights to strike, to collective bargaining and to collective action. On the country-of-origin principle, the rapporteur proposes limiting it to company law matters only, warning that the Commission's broader formulation risks turning EU Inc. into a vehicle for circumvention of national protection standards rather than a European seal of quality for innovation. Upon incorporation, the report preserves fully digital registration within two working days at a maximum cost of €100, while requiring competent authorities to verify the applicant's identity, the authenticity of the information submitted, and anti-money laundering compliance prior to registration. On governance, it introduces a voluntary steward-owned EU Inc. model and complements existing employee stock options (ESOs) with employee stock ownership plans (ESOPs), clarifying that neither instrument may replace fair wages, pensions, or social security contributions. On insolvency, the report amends the Commission's existing simplified winding-up procedure for startups by removing the legally ambiguous reference to "innovative" and making the appointment of an insolvency practitioner mandatory as a general rule. The deadline for amendments is 17 July 2026, with adoption of the report scheduled for September 2026.
European Parliament Committee debates EU approach to corporate tax policy amid geopolitical uncertainty
On 25 June 2026, the European Parliament's Subcommittee on Tax Matters (FISC) discussed amendments to the draft own-initiative report by rapporteur Kinga Kollár (EPP, Hungary) on the EU's approach to corporate tax policy in a changing international environment, following the submission of more than 170 amendments. The rapporteur welcomed the publication of the Tax Omnibus package as reflecting many of the report's proposals and stressed that the most effective solutions on digital taxation would be multilateral rather than unilateral. The S&D called for a common EU digital levy given stalled Pillar One negotiations, an impact assessment on the substance-based safe harbour arrangement linked to the United States, qualified majority voting on corporate tax matters relating to evasion and avoidance, and a windfall profits tax. Renew supported reinforcing international cooperation through the OECD, SME exemptions, and simplification to provide businesses with legal certainty. The Left called for taxation of digital giants and simultaneous action at Member State, UN and OECD levels. Across groups, Members supported reducing fragmentation in Pillar Two, greater tax transparency including public country-by-country reporting, and reform of the EU tax haven list. The rapporteur warned that introducing an EU digital tax under current geopolitical circumstances could trigger a trade war, and stressed that simplification remained the strongest area of political consensus. Compromise negotiations are ongoing.
OECD global minimum tax: new developments on implementation and economic impact
On 25 June 2026, the OECD published a revised version of its common understanding on the global minimum tax (GMT), originally published on 18 May 2026, to reflect that the Bahamas, Greece and the Slovak Republic have joined or clarified their participation. The common understanding is a voluntary arrangement among implementing jurisdictions that allows multinational enterprises (MNEs) to file a single centralised GloBE Information Return rather than submitting separate filings in each jurisdiction where they operate, reducing administrative burdens and compliance costs ahead of filing deadlines. Poland joins the common understanding with respect to EU Member States only, while the Slovak Republic joins with respect to all jurisdictions in the Annex except those without an activated exchange relationship with the Slovak Republic. North Macedonia and Vietnam have not been able to join. The common understanding now covers almost all 2024 implementing jurisdictions. The OECD will also host a virtual webinar on 15 July 2026 (16:00-17:30 CEST) presenting the results of its 2026 Economic Impact Assessment of the GMT, including the Side-by-Side package, covering effective tax rates, profit shifting and tax revenues, as well as preliminary post-implementation data on the GMT's impact on MNEs' effective tax rates and investment and employment decisions. Prior registration is required for participation.
