On 24 June 2026, the European Commission published a tax simplification package designed to simplify EU tax rules and reduce compliance burdens for businesses. It contained two proposals: a recast of the Directive on Administrative Cooperation (DAC) framework and a package referred to as a ‘Tax Omnibus’ which proposes amendments to some of the other key EU Tax Directives. This article provides a brief summary of each with links to further detail published by KPMG’s EU Tax Centre.
DAC recast proposal
The DAC recast proposal aims to streamline the application of certain rules in the DAC framework through a series of targeted amendments, including:
- DAC4 /DAC9 - An option for multinational enterprise (MNE) groups in scope of Country-by-Country Reporting and Pillar Two to file a combined notification form to report which group they are a part of and who is filing the report on their behalf and by when. Such groups are currently subject to notification requirements under both sets of rules;
- DAC6 - A number of amendments to the EU Mandatory Disclosure Rules, including a reporting exemption for groups in-scope of Pillar Two (subject to conditions), and changes to the list of hallmarks (e.g. removal of generic hallmarks under section A), the reporting period (i.e. trigger point only where the first implementation step is taken and extension of the filing deadline from 30 to 90 days) and the notification requirements for intermediaries subject to legal professional privilege; and
- DAC7 - A number of changes to the EU reporting obligations for platform operators, including clarifications of the term ‘Platform Operator’, exclusion of certain small and medium sized Platform Operators, amendments to the exclusion criteria for sellers of low-value goods, and exclusion of related party sellers.
Other measures in the DAC recast proposal include the automatic exchange of information on beneficial ownership for real estate and the introduction of a new digital tool to enable the automated verification of the correctness of Tax Identification Numbers.
For more information, please see Euro Tax Flash 583 from KPMG's EU Tax Centre.
Tax Omnibus proposal
The Tax Omnibus proposal is aimed at simplifying EU tax rules, reducing compliance burdens for businesses, and strengthening the competitiveness of the Internal Market. Key proposed updates include:
- Parent-Subsidiary Directive / Interest & Royalties Directive - Removal of holding requirements – broad withholding tax exemption for intra-EU dividends, interest and royalties between eligible companies, withholding tax relief on dividends paid to pension institutions;
- Anti-Tax Avoidance Directive - Introduction of EU-wide Research and Development (R&D) allowance, changes to Interest Limitation Rules (e.g. mandatory deductibility threshold of 30 percent tax EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation), EUR 3 million de-minimis safe harbour made mandatory, exclusion for qualifying third-party debt, exclusion for public benefit projects and defence sector), carve out from scope of controlled foreign company (CFC) rules for groups in scope of Pillar Two and small and medium enterprises (SMEs), mandatory application of categorical passive-income approach for CFCs, extension of the scope of the general anti-abuse rule (GAAR) to withholding tax and Pillar Two top-up taxes, and removal of rules on imported mismatches;
- Dispute Resolution Directive - Clarification of the scope, simplification of the complaint process, clearer rejection grounds with safeguards (e.g. 30-day remedy period), earlier taxpayer notification requirement if no agreement is reached, extension of the scope to include admissibility issues, and simplified filing mechanism for SMEs and individuals; and
- Merger Directive: Alignment of scope with recent EU company law developments (to include simplified mergers and divisions by separation), and extension of tax neutrality to cross-border conversions.
For more information, please see Euro Tax Flash 582 from KPMG's EU Tax Centre.
Both of these proposals were discussed in a webcast hosted by KPMG’s EU Tax Centre on 29 June 2026 – if you are interested in what was discussed but were unable to attend please view the recording.