Accountancy Europe's paper calls for a streamlined, tech-enabled EU tax framework to ease burdens from complexity, overlaps, and outdated processes
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In 2023, environmental tax revenue in the EU reached EUR 341.5 billion, representing 2% of EU GDP and 5.1% of total government revenue from taxes and social contributions (TSC), according to the latest Eurostat statistics.
The report shows that energy taxes made up for more than three-quarters of these revenues, accounting for 76% of the total in 2023. They were followed by transport taxes (19%), and pollution and resources (5%).
Member States collected over EUR 33 billion in VAT via the EU’s e-commerce systems in 2024, according to a European Commission (EC) report published on 23 July.
Through a single registration in one Member State, the One Stop Shop (OSS) and Import One Stop Shop (IOSS) allow businesses to declare and remit VAT for cross-border sales of goods and services in the EU, as well as for imports of low-value goods. According to the EC, companies are leveraging these simplifications to cut red tape and compliance costs, while ensuring the collection of VAT.
In 2024, over EUR 24 billion was declared via the Union OSS, EUR 2.8 billion via the non-Union OSS, and EUR 6.3 billion through the Import OSS, representing a 26% increase compared to 2023. Since the reforms were introduced in mid-2021, Member States have collected nearly EUR 88 billion in VAT under the OSS and IOSS schemes.
The EC is inviting stakeholder feedback for a potential reform of the EU’s special VAT scheme for travel agents and VAT rules on passenger transport. The deadline for input is 16 October.
Accountancy Europe is currently preparing a response to the consultation.
The EC plans to propose a Circular Economy Act at the end of 2026. The initiative aims to enhance the EU’s economic security and competitiveness, while promoting more sustainable production, circular economy business models and decarbonisation. Stakeholders can provide input until 6 November.
The Act is expected to:
The consultation also covers tax elements, such as tax incentives for boosting the circular economy, or eliminating VAT embedded in the value of recycled goods.
The EC published three Calls for Evidence documents on the Carbon Border Adjustment Mechanism (CBAM) on 28 August. Stakeholders are invited to share their feedback on the documents until 25 September.
The Calls for Evidence documents are available from these links:
On 24 September, the EC and EU Member States launched the Second Pilot of the European Trust and Cooperation Approach (ETACA). This is an initiative seeks to reshape how tax administrations and multinational enterprises (MNEs) collaborate on cross-border tax matters in the EU.
By fostering early dialogue, mutual trust, and greater transparency, ETACA aims to provide participating MNEs with an opportunity to gain enhanced tax certainty on their transfer pricing policies across the EU.
To mark the launch, the EC hosted a dedicated conference to present the initiative and its benefits for both MNEs and tax administrations. Tax Notes has since published an article with the key take-aways.
Accountancy Europe has long advocated for a pan-European cooperative compliance framework. Our senior director Paul Gisby was honoured to speak at the event on behalf of our organisation.
Interested companies and their advisors are encouraged to consider participating in the pilot project.
Many MEPs from S&D, Greens, Renew Europe and EPP groups underlined the need to address taxation of the digital economy.
Tax justice and sovereignty emerged as key themes, with repeated calls for the EU to act independently rather than depend on US approval. On that point, several MEPs voiced distrust towards the US, criticising the EC for negotiating what they saw as a poor US-EU trade deal that undermined tax justice.
Commissioner Michael McGrath remained cautious, reiterating the EC’s commitment to multilateralism and the OECD’s Two-Pillar solution. He noted that if the international approach fails, the EC will consult the EP and Member States for an alternative solution. However, he stressed that it is too early to plan ahead.
On 10 September, the EP Plenary adopted its draft report “Facilitating the financing of investments and reforms to boost European competitiveness and creating a Capital Markets Union (Draghi Report)”, with MEP Aurore Lalucq (S&D/France) leading the work.
The report contains several legally non-binding recommendations on taxation. These include urging the EC to support Member States design tax incentives that promote retail investment, and simplify procedures for reclaiming withholding taxes.
The EC is currently expected to publish a non-binding Recommendation for Member States on the design of retail investment products, including related tax incentives.
The EP’s FISC Committee sent a delegation to Cyprus to discuss the country’s tax system and prospective tax reforms. The delegation consisted of four MEPs: Kira Marie Peter-Hansen (Greens-EFA/Denmark), Michalis Hadjipantela (EPP/Cyprus), Kinga Kollár (EPP/Hungary) and Pierre Pimpie, (PfE/France).
MEP Peter-Hansen issued a public statement, saying that “Cyprus is moving forward with a comprehensive tax reform to make its economy more competitive” and outlining remaining tax challenges.
The delegation met with the President of the House of Representatives and Members of the Standing Committee on Financial and Budgetary Affairs, as well as the Deputy Commissioner for Taxation. They also met civil society representatives and researchers, trade union representatives, accounting and tax consulting firms, and the Employers and Industrialists Federation.
Parliament’s FISC Committee organised a hearing with Commission’s representatives, businesses and academia to discuss:
DG TAXUD’s Benjamin Angel focused on the US refusal to implement Pillar 2, differences between global and jurisdictional blending, and called for an OECD safe harbour, which he argued would not require changes to the EU Directive. Other speakers said that international tax cooperation has become more challenging due to US actions, but emphasised that the EU is far from being alone in supporting Pillar 2, which could reduce profit shifting by up to 50%.
Quentin Parrinello from the EU Tax Observatory urged caution in aligning with the US model, stressing the continued importance of a minimum tax rate under Pillar 2 and its interlocking principle.
Meanwhile, Business Europe’s Lucio Vinhas de Souza warned that without global adoption, the OECD rules risked undermining the EU’s competitiveness. He also said that the ‘side-by-side’ approach would spare US companies many of the burdens faced by EU companies.
The Parliament’s ECON Committee adopted its draft opinion on the Business in Europe: Framework for Income Taxation (BEFIT) proposal. The draft introduces several changes from the original Commission’s proposal, including the concept of “significant economic presence”. Under this rule, companies are required to have a permanent establishment in an EU Member State if, for example, the BEFIT group’s revenues from that country exceed EUR 1 million.
The next step is a final vote in Plenary, currently expected for 12 November. Once adopted, the Plenary position will be sent to the Council, where Member States must adopt the final text by unanimity. At the time of writing, however, no immediate progress in the Council is expected.
Rising health expenditures and population ageing prompted many governments to increase social security contribution rates in 2024, reflecting a broader trend towards increasing revenues to strengthen the long-term sustainability of social protection systems, according to a new OECD report.
The tenth annual edition of Tax Policy Reforms: OECD and Selected Partner Economies provides a comprehensive overview of tax reform trends, offering cross-country comparisons and tracking policy developments over time.
The 2025 edition describes tax reforms implemented in 2024 across 86 jurisdictions, including all OECD countries. The report finds that governments increasingly implemented reforms to raise revenues for specific spending needs – most notably through measures aimed at funding current and future expenditures linked to population ageing.
Denmark is to stop charging VAT on books in an attempt to get more people reading. At 25%, the country’s tax rate on books is the highest in the world, a policy the government believes is contributing to a growing “reading crisis”.
The culture minister, Jakob Engel-Schmidt, announced on 20 August that the government will propose the removal of this tax. The move is expected to cost 330 million kroner (EUR 44 million) a year.
