Highlights from ETAF 10th Anniversary Conference
On 3 November, ETAF marked its tenth anniversary with a conference in Brussels, sponsored by DATEV, gathering 120 participants from the EU institutions, the OECD, national professional bodies and tax practice.Opening the day, ETAF President Philippe Arraou called on the EU institutions to recognise the profession’s role and make tax advisers real partners in shaping tax legislation. In her keynote, Anabela Santos (OCC) challenged the view that professional regulation obstructs the Single Market. The first panel on the evolving role of the profession agreed that AI will take over routine tasks while judgement and accountability remain human, and discussed attracting young talent, the risks of private equity for professional independence and the burden of AMLA’s draft AML RTS on smaller practices. In his keynote, Gerassimos Thomas, Director-General of DG TAXUD, said the Commission will focus on implementation and simplification through the Tax Omnibus and the DAC recast for the coming years, while warning that Member States’ reluctance could diminish their impact. The second panel dedicated to tax decluttering debated exempting Pillar Two groups from CFC rules and DAC6, gold-plating, legal professional privilege and the need for revenue impact assessments. In his keynote, MEP Pasquale Tridico argued that tax systems still rest too heavily on labour and called for new revenue from the digital economy and AI, and for the taxation of ultra-high-net-worth individuals. The final panel addressed fiscal consolidation, the taxation of capital, labour mobility and own resources, recommending targeted harmonisation where necessary. More information is available in our press release.
ETAF issues feedback on the Tax Omnibus proposal
On 5 November, ETAF responded to the European Commission’s public consultation on its proposal for a direct taxation Omnibus, which aims to simplify the EU direct tax framework. ETAF welcomes the proposal as a shift in EU tax policy away from adding new layers of rules and towards simplifying existing ones, in particular the carve-out of SMEs and in-scope Pillar Two groups from the CFC rules and the deletion of the imported mismatch rule. ETAF also supports removing minimum shareholding thresholds and prior authorisation procedures for withholding tax relief, but calls for a harmonised ex post verification framework and protection for payers who act in good faith. It broadly endorses the changes to the interest limitation rule, while recommending a safe harbour above €3 million and a less demanding economic safeguard than the proposed 50% EBITDA decline. To avoid putting groups that remain subject to CFC rules at a disadvantage, ETAF suggests capping the tax burden on CFC income at 15%, and it opposes extending the GAAR to withholding taxes and Pillar Two top-up taxes. On the new EU-wide R&D allowance, ETAF regrets that stakeholders were not consulted in advance and asks for intangible assets to be covered and for loss-making companies to benefit. It also supports the non-divergence clauses and the procedural improvements to the Dispute Resolution Mechanisms Directive. ETAF stresses, however, that the success of the Tax Omnibus will depend on its implementation: simplification must reach businesses in good time and be applied in the same way in all Member States. It therefore calls for the amendments deferred to 2032 and 2037 to apply from 1 January 2029 instead.
European Commission releases 2027 Work Programme
On 4 November, the European Commission presented its 2027 Work Programme, which focuses on simplification and implementation and contains 23 new initiatives across all policy areas, several of them non-legislative, and no new tax proposal. Three announced initiatives are relevant to the tax profession. A measure to prevent new Single Market barriers is planned for Q3 2027 in line with the 2025 Single Market Strategy. A new non-legislative Pact against gold-plating, with timing yet to be confirmed, would ask Member States to disclose the requirements they add when transposing EU law and their impact on businesses and the Single Market, and would introduce a “review and remove” mechanism in the European Semester. A non-legislative Skills Guarantee, also planned for Q3 2027, would help workers upskill and reskill for growing and strategic sectors and support young people facing the impact of AI on the labour market. The Commission also proposes to withdraw several tax files that are unlikely to secure unanimity in the Council within a reasonable timeframe. The list includes the 2018 proposal on the corporate taxation of a significant digital presence, the 2021 revision of the Energy Taxation Directive, the 2023 Head Office Tax (HOT) proposal for SMEs, the 2023 BEFIT proposal and the remaining part of the 2023 VAT proposal on distance sales of imported goods and the IOSS if it fails to secure support in the ongoing Council negotiations.
European Commission publishes 2026 Overview Report on Simplification, Implementation and Enforcement
On 4 November, the European Commission released its 2026 Overview Report on Simplification, Implementation and Enforcement. In the area of taxation, the Commission points to the Tax Omnibus proposal and the recast of the Administrative Cooperation (DAC) as important steps to make EU tax rules easier to follow, cut down on reporting, and give more legal certainty. The report also mentions that stakeholders are worried about extra national requirements, especially for digital tax reporting, and divergent interpretations and applications of EU rules. Regarding tax enforcement, the Commission reports infringement action against discriminatory taxation of dividends paid to other Member States, incorrect application of the Parent-Subsidiary and Tax Merger Directives, and unjustified geographical restrictions on tax incentives for employment and R&D. It also highlights national tax incentives favour investments in local markets or currencies, which may discriminate against cross-border investments. In the area of professional regulation, the Commission reports enforcement action concerning restrictions on accountants' multidisciplinary activities, as well as barriers to setting up businesses and providing services across borders. The report also points to better recognition of professional qualifications between Member States.
Commissioner Hoekstra outlines tax policy priorities to boost EU competitiveness
On 6 November, Commissioner for Taxation Wopke Hoekstra gave a speech at the 22nd Athens Tax Forum about his main goals for making the EU more competitive through tax policy. He noted that the need for unanimous agreement often slows down EU tax decisions, so he suggested that groups of willing Member States could move ahead with tax initiatives, such as a possible EU investment incentive for climate, innovation, and clean technologies. He also called for more tax harmonisation to make it easier for businesses to operate across borders and stressed the need to simplify tax rules. He highlighted the Commission's Tax Simplification Package, which aims to cut administrative burdens without weakening enforcement. On VAT, Hoekstra mentioned the VAT in the Digital Age (ViDA) package, which would make cross-border business easier with a single VAT registration and better fraud detection through digital reporting. He also underlined the need to reduce tax gaps and improve tax collection, announcing that the Commission's next Mind the Gap report will offer specific recommendations to make tax collection more efficient across the EU.
Irish Presidency sticks to its plan to reach agreement on the Tobacco Taxation proposal on 9 November
The Irish Presidency of the Council of the EU intends to seek a deal on the recast of the Tobacco Taxation Directive at the ECOFIN Council on 9 November, despite Sweden’s request to remove the item from the agenda. Sweden indeed argued that, as a new government has not yet been formed, it cannot currently depart from the position it set out at the 12 June ECOFIN meeting, when it opposed the proposed minimum excise duties on tobacco-free nicotine pouches. In a note circulated to Member States on 5 November, the Presidency confirms its intention and considers that its compromise package provides a balanced basis for agreement, while recognising that Finance Ministers will have to settle the minimum rates for nicotine pouches at the Council on 9 November. To ensure that all Member States can accept these rates, and in light of the political and cultural sensitivities involved, the compromise sets the minimum excise duty for nicotine pouches at 10% of the retail selling price or EUR 30 per kilogram from 1 January 2028, with a gradual step increase to 25% or EUR 40 per kilogram from 1 January 2030 until 31 December 2031. The final gradual step increase sets the minimum excise duty at 50% of the retail selling price or EUR 50 per kilogram from 1 January 2032.
First ECON discussion on the DAC recast
On 3 November, the ECON committee discussed for the first time the draft report on the recast of the Directive on Administrative Cooperation (DAC), prepared by rapporteur Francisco Assis (S&D, Portugal). The Rapporteur stressed the importance of transparency and opposed the proposed DAC6 reporting exemption for groups covered by the OECD minimum tax framework, citing insufficient evidence, Member States’ reservations and risks to tax enforcement and revenues. He proposed clearer economic substance criteria for cross-border entities, sought to preserve Member States’ ability to adopt stricter measures, advocated extending automatic information exchange to assets such as private planes and yachts, and expressed hope for broad consensus. EPP, S&D, and the Left groups indicated some concerns regarding the Commission’s intention to exempt from DAC6 the companies which are subject to Pillar Two. EPP has also retained concerns about the deletion of the anti-duplication provisions, which has also been the top priority for the PfE, which would not be able to support this draft report in its current form, being in favour of the Commission’s exemption, and providing clear and simplified obligations. Renew stressed the need to provide effective simplification while respecting national competencies and the work of the tax authorities. The deadline for amendments was set for 12 November, with an ECON vote scheduled for 14 January 2027. The discussion can be watched again here.
FISC hearing on taxation and the circular economy
On 4 November, the European Parliament’s Subcommittee on Tax Matters (FISC) held a public hearing on how EU tax policy, in particular VAT, can better support the circular economy, with experts from SME United, the European Environmental Bureau and a researcher from the Austrian Science Fund. The discussion looked at whether the current tax framework creates obstacles to re-use and waste reduction, how tax policy could encourage more circular business models, and how such measures should be designed given their implications for businesses. It took place ahead of the Commission’s Circular Economy Act, which is expected to include tax-related measures and is due on 18 November 2026. MEPs asked the experts how best to deal with externalities, how to improve margin schemes through targeted measures, how to boost material recycling and investment in recycled raw materials, and whether a lower VAT rate for eco-designed products could be considered. MEPs also voiced opinions saying that VAT should be used to steer demand and should not be a neutral tax, or warning that variances in VAT rates increase business costs and risks of fraud. Some also feared that using tax to support the circular economy could put EU companies at a disadvantage and push production offshore, which would undermine the intended environmental effect. The hearing can be watched again online and all presentations can be found here.
