EU: Outcome of January 2025 ECOFIN meeting; European Commission competitive compass communication

The Council of the EU on January 21, 2025, issued a press release regarding the outcome of the January 2025 meeting of the Economic and Financial Affairs Council of the EU (ECOFIN).

The release indicates that the meeting focused on enhancing Europe's global business competitiveness through simplification and reduction of regulatory burdens, and the Ministers welcomed plans announced by the European Commission (EC) for an “omnibus” of various simplification packages for reducing bureaucracy in certain areas. 

Read a February 2025 report prepared by the KPMG’s EU Tax Centre

In addition, the EC on January 29, 2025, published its roadmap to policy-making for the current five-year legislative term—the Competitiveness Compass for the EU, focused on simplifying, investing and accelerating the EU's economic priorities. From a direct tax perspective, key measures include: 

• Innovation: The EC proposes offering innovative companies the possibility to operate across the entire EU under a single set of rules (the so-called 28^th legal regime), which aims to simplify and harmonize EU-wide rules, including tax law and other business-related legal fields. 
• Decarbonization and competitiveness: The EC aims to encourage Member States to adjust tax systems, including depreciation rules and tax credits, to support private investment in clean technologies.  
• Simplification: The EC aims to cut reporting burdens by at least 25% for all companies and 35% for SMEs, with a future goal of extending these reductions to all administrative costs (i.e., not only reporting requirements).

Read a February 2025 report prepared by the KPMG’s EU Tax Centre