The EU is Ireland’s largest collective trading bloc, accounting for over a third of Irish exports. As one of Europe’s leading hubs for international investment, Ireland understands what businesses need to invest, scale and compete, writes KPMG’s Olivia Lynch.
A simpler tax framework for a more competitive Europe
Europe faces a defining competitiveness challenge as countries compete for investment and talent amid geopolitical uncertainty and rapid technological change. Businesses need certainty and stability yet layers of domestic legislation and EU directives have increased complexity.
With regulatory simplification now central to the EU competitiveness agenda, Ireland’s Presidency represents an opportunity to support a more streamlined, business-friendly tax framework and reinforce Europe’s attractiveness as a place to invest and innovate.
Complexity has become a growth issue
The European Commission has recognised that complexity is now a competitiveness issue. Over 60% of EU companies see regulation as an obstacle to investment, while 55% of SMEs identify regulatory and administrative burdens as their main challenge.
Tax and regulatory reform are therefore moving to the centre of the EU growth agenda, with a focus on reducing compliance burdens, strengthening the Single Market and supporting investment and job creation.
Tax reform proposals
In June 2026, the European Commission adopted a tax modernisation package aimed at streamlining EU tax rules and strengthening the Single Market with the aim of saving businesses up to €8 billion annually.
The measures aim to rationalise aspects of EU direct taxation and streamline tax reporting and administrative cooperation rules for cross-border businesses. The package includes two key proposals:
Together these proposals signal a more practical and business-focused approach to tax reform across the EU, aligning regulatory streamlining with Europe’s wider economic agenda.
Ireland’s opportunity during the EU Presidency
Ireland’s EU Presidency gives Ireland an important opportunity to advance practical, growth-focused tax and regulatory reform across Europe. By supporting measures that reduce unnecessary reporting and make cross-border rules easier to apply, Ireland can encourage a better environment for trade and investment.
This matters for both multinationals and scaling indigenous businesses and supports Europe’s wider ambition to sharpen its competitive edge and deepen the Single Market.
What the Tax Omnibus could mean for Irish taxpayers
For Irish taxpayers, the direction of travel is positive but the detail will matter. The Tax Omnibus proposal would amend the Interest-Royalties Directive and the Parent-Subsidiary Directive to ease withholding tax treatment for cross-border payments. It could also reduce administrative burdens in areas such as interest limitation rules and reporting obligations.
While many of the changes are proposed to take effect over a longer timeframe, the overall signal is for more consistent rules that reduce administrative friction for business.
The Tax Omnibus Directive will be an important part of Ireland’s EU Presidency tax agenda, though agreement may be difficult to conclude within the Presidency timeframe.
As a tax measure requiring unanimous approval by EU Member States, and given its potential impact on national tax receipts, negotiations are likely to be challenging, and further changes remain possible.
The European Commission is proposing that most of these changes would not come into force until 2037, signalling a long implementation horizon.
The DAC Recast may be more capable of progress in the near term, as it is more focused on streamlining reporting and administrative cooperation rather than directly affecting Member State tax revenues.
As Ireland chairs Council discussions during its Presidency and as the Commission progresses its simplification agenda, KPMG will continue to monitor developments closely for clients and provide feedback to Government on how the measures can be refined to reduce complexity for businesses.
Get in touch
Ireland's EU Presidency will help shape the future direction of Europe.
To discuss how this could impact your organisation, get in touch with Olivia Lynch; we'd be delighted to hear from you.
