EU tax package ‘will save firms €8 billion’
The European Commission has put forward plans to simplify its tax rules and reduce compliance costs for businesses.
The EU body says that, while significant developments in its tax framework over the past decade have delivered important results, their cumulative effect has also increased complexity and compliance costs for businesses operating across borders.
The package announced today (24 June) comprises two proposals: the Taxation Omnibus and the Recast of the Directive on Administrative Cooperation (DAC).
The commission estimates that the proposals will save EU businesses around €8 billion a year – including €3.3 billion in administrative costs.
Withholding tax
Among the proposals in the omnibus is an exemption from withholding tax on all cross-border payments of dividends, interest, and royalties between companies in the EU.
The EU body says that this measure alone should bring EU taxpayers savings and benefits of around €5.3 billion a year.
The commission also aims to remove what it describes as “unnecessary restrictions on genuine third-party and market financing” to make it easier for businesses to invest in the EU.
Reporting obligations
On the DAC, the commission says that the recast proposals will bring the directive and its eight amendments together into one single legal text.
It also introduces new measures, such as the removal of reporting obligations linked to certain cross-border arrangements for multinational companies.
The recast increases the reporting threshold for the online sales of goods – a change that the EU body says will remove reporting obligations on over 10 million private sellers, particularly those selling second-hand goods.
Economy commissioner Valdis Dombrovskis said that the proposals would help remove obstacles to cross-border investment and economic activity.
The package will now be submitted to the European Parliament for consultation and the EU Council for adoption.