The event recap is now available! Read more about our event on upcoming DAC recast and future EU tax transparency
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The European Commission (EC), the European Parliament (EP) and the Council have agreed on a joint roadmap with timelines for completing a set of legislative initiatives to further integrate the EU Single Market, in a document titled “One Europe, One Market Roadmap”.
This is a strong signal from the institutions, as they are the ones to determine when EU legislation is finalised. Among the highlights, the institutions agreed on the following timelines for concluding the following legislative proposals:
All of these proposals, as well as the other ones listed in the roadmap, are explicitly designed to improve the Single Market, particularly for SMEs, while reducing administrative burdens.
The EC has published its Better Regulation Communication, with two annexes outlining actions to improve impact assessment, enforcement, stakeholder consultation and other aspects of the EU legislative process. Accountancy Europe contributed by responding to the related Call for Evidence.
A central commitment is the new “simplicity by design” principle to make future EU legislation easier to understand and apply. Measures include greater use of fully harmonised regulations – rather than directives – to limit fragmentation and gold-plating, alongside realistic timelines, phased obligations and stronger consideration of SME needs under the “think small first” principle.
On existing rules, the EC is also launching a Regulatory Deep Cleaning Action Plan covering 12 priority sectors, including financial services, digital and energy. The aim is to remove overlaps, reduce reporting obligations and cut compliance costs, building on simplification efforts expected to deliver at least €15 billion in recurring savings.
Enforcement measures are set to become more robust as well. The EC will accelerate infringement procedures, limit deadline extensions for Member States, and increase financial penalties for non-compliance. In one of the accompanying annexes, the EC identifies certain tax concerns as an area of priority enforcement, noting that “Member States tax dividend and payment streams as well as mergers, divisions and acquisitions differently, meaning an incorrect application of the Parent Subsidiary Directive and the Tax Merger Directive. Tax incentives for employment, research and development face in certain instances also unjustified territorial restrictions.”
Finally, new measures to tackle gold-plating, improve consultations, and streamline impact assessments aim to create a more predictable and SME-friendly regulatory environment.
In the latest infringements package, the EC announces its decision to call on Spain to put an end to discriminatory taxation of non-resident taxpayers working and habitually living in Spain.
The EC also decided to refer Hungary to the Court of Justice of the European Union (CJEU) for failing to abolish its retail tax regime.
The EC has published a new paper that assesses the fiscal costs and redistributive effects of reduced VAT rates in the EU. It argues that reduced VAT rates on food and beverages, housing, water and electricity, and health-related products are the most cost-effective in achieving redistribution.
On the other hand, reduced rates on other goods and services, such as restaurants and accommodation, offer limited redistributive returns at best, while being fiscally costly. Moreover, the paper notes that pension-age, female-headed, and rural households benefit disproportionately from reduced VAT rates due to their consumption patterns.
This legally non-binding draft report was prepared by MEP Kinga Kollár (EPP/Hungary). It warns that the EU’s corporate tax framework is becoming increasingly complex and internationally unbalanced. The report highlights that while Pillar Two has been implemented across many Member States, global uptake remains uneven, most notably with China and India still on the sidelines.
A central concern is the OECD’s new Side‑by‑Side (SbS) approach, under which the US Net CFC Tested Income (NCTI) regime was granted safe‑harbour status in January 2026. According to the report, this effectively exempts US‑headquartered multinationals from most Pillar Two obligations, while EU‑parented groups remain fully exposed. The text warns that this asymmetry “risks placing EU‑headquartered businesses at a significant competitive disadvantage,” citing structural differences between NCTI and Pillar Two, including blending methods and effective tax rates.
The draft report calls on the EC to propose corrective measures, deploy anti‑subsidy tools where needed, and prioritise simplification by potentially revisiting ATAD CFC rules, the Parent‑Subsidiary and Merger Directives, DAC, and the BEFIT proposal.
With digital taxation negotiations stalled and unilateral measures proliferating, the report urges Member States to coordinate more closely in global forums to safeguard EU tax sovereignty and competitiveness.
A final vote on the draft report in EP Plenary is currently scheduled for 5 October.
The final agreement, reached on 5 May, aims to strengthen cooperation and VAT data sharing between national tax authorities, the European Public Prosecutor’s Office (EPPO), the European Anti-Fraud Office (OLAF), and the Eurofisc network of anti-fraud experts.
Fraudsters operating across borders exploit weaknesses in the tax system to avoid paying VAT, often charging consumers for VAT that is never passed on to the state. The Council notes that both EPPO and OLAF are active in cross-border fraud investigations. The Eurofisc network of Member State experts on VAT fraud also works on the issue, sharing and analysing data to spot cases of fraud. Until now, however, it was complex for the EPPO and OLAF to access this vital information using repetitive bilateral exchanges with Member States. This bottleneck slows investigations, allowing more illicit traders to get away with fraud.
The EC proposal of November 2025 aimed to streamline the process and give the EPPO and OLAF easier access to the data they need to conduct their investigations. The Eurofisc network will be mandated to transmit its own VAT fraud-related risk analysis to the EPPO and OLAF in certain circumstances. The EPPO and OLAF will also gain direct and targeted access to Member State’s VAT information under strict conditions and in line with data protection rules.
In the final agreement, Member States’ finance ministers largely maintained the objectives and approach of the EC proposal with some precisions.
At Accountancy Europe’s recent conference on the future of the Directive on Administrative Cooperation (DAC), Benjamin Angel (DG TAXUD) set the tone with a clear message: the EU’s tax transparency framework must become simpler, more coherent and more usable. These are among the EC’s key objectives for its upcoming 24 June DAC recast.
Angel confirmed that the EC plans to merge the nine existing DACs into a single instrument, address overlaps such as DAC4/DAC9, and revisit complex areas like DAC6 hallmarks and the 30‑day reporting deadline. He also stressed the need to improve data usability, pointing to upcoming initiatives such as an EU taxpayer identification tool that would co-exist with national systems, and better use of Country‑by‑Country data for statistical purposes.
The two panel discussions reinforced these themes. Panel 1 highlighted the success of DACs in boosting transparency and cooperation, but also the persistent challenges: divergent national interpretations, precautionary reporting under DAC6, and inconsistent data quality across Member States, among others.
Panel 2 looked ahead, calling for significant simplification, especially of DAC 6, and for more harmonised guidance to reduce fragmentation. Speakers also underlined the potential of technology and AI to support both compliance and enforcement, provided safeguards and proportionality remain central. Cooperative compliance integrated as part of DAC would also be a powerful system, as one speaker pointed out.
Overall, the event showed strong momentum for a DAC framework that delivers transparency without unnecessary complexity.
European Commission
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The Guardian
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European Central Bank
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