European Parliament takes ambitious positions on tax simplification

Accountancy Europe warmly welcomes the European Parliament’s adoption of the draft report Role of simple tax rules and tax fragmentation in European competitiveness” led by MEP Michalis Hadjipantela (EPP/Cyprus). At a time where the European Commission is actively working to simplify EU tax legislation, this report is both timely and highly relevant.

Our CEO, Eelco van der Enden, commented:

“The report identifies key areas and measures to improve the tax systems and reduce administrative burdens for both taxpayers and tax administrations, all while safeguarding revenues. We especially welcome the strong emphasis on easing compliance for SMEs. This pragmatic approach is commendable, and we believe the report’s insights deserve serious consideration from the Commission.”

Accountancy Europe recently published its own tax simplification recommendations, many of which align with Parliament’s position. We especially welcome the report’s calls for the Commission to:

• assess the equivalence between the EU’s public country-by-country reporting (CBCR) Directive and the GRI 207 standard
• explore a dedicated EU funding programme to strengthen tax administrations’ capacity
• review DAC6, including clarifying hallmarks, and assess DAC7 in light of real-time reporting under VAT in the Digital Age (ViDA)
• regularly evaluate reduced VAT rates to ensure their necessity and effectiveness
• explore integrating cross-border VAT refunds into the One Stop Shop (OSS) to simplify compliance
• assess eliminating VAT charges on goods supplied free of charge for social and environmental benefit

The report also highlights the Commission’s ongoing pilot project on cooperative compliance for businesses (ETACA). Accountancy Europe urges the Commission to eventually take up key learning points from this project, and on that basis develop an EU blueprint, in the form of a recommendation, for Member States on designing effective and efficient cooperative compliance programmes.

Accountancy Europe has for over 10 years supported the EU’s tax agenda with concrete and pragmatic solutions, and also actively participates in the Commission’s relevant stakeholder groups. Building on this, we stand ready to continue supporting both the Commission and co-legislators in identifying balanced and pragmatic solutions.

Eelco van der Enden added:

“Now is this time to act. The Commission should leave no stone unturned. Many simplification measures depend more on political will than technical feasibility. The EU institutions now have an opportunity to show how serious they are about improving compliance, supporting SMEs, and building a tax system fit for the future.”