MEP Ódor urges Parliament to endorse Council’s ViDA deal, paving way for swift adoption (see article below). Read more about the ViDA Directive in our publication
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The European Commission (EC) published on 10 June a new Call for Evidence (CfE), asking stakeholder feedback and ideas to help design a European blueprint for savings and investment accounts.
The EC’s intention is to develop a soft-law recommendation for a blueprint – in autumn 2025 – for such accounts that EU member states can then set up nationally. This blueprint is a part of the EC’s Savings and Investments Union (SIU) strategy that aims to build up European capital markets, ensure better saving and investment opportunities for retail investors, sufficient and diverse funding for Europe’s companies and more.
As part of this CfE, the EC also asks stakeholder views on the tax elements of such investment products, such as on the pros and cons of tax incentives and their design. The deadline for stakeholder feedback is 8 July.
The latest infringement package includes additional tax-related measures that the Commission is pursuing against certain EU member states for suspected non-compliance with relevant EU legislation.
For example, the EC is urging Spain to end the discriminatory taxation of dwellings owned by non-resident individuals and used as their habitual residence. It is also calling on Hungary to abolish its retail tax regime, which it considers incompatible with the EU’s freedom of establishment.
If member states fail to respond adequately, the EC may take follow-up measures, including referring the cases to the Court of Justice of the EU (CJEU).
The Annual Report on Taxation (ART) offers a detailed overview of taxation policies across EU countries. The report assesses recent trends in EU tax systems and identifies ways to enhance compliance.
The European Parliament’s (EP) FISC Committee organised on 3 June a workshop on the taxation of the EU financial sector. It hosted two experts from the WIFO institute who presented their study on the topic. The workshop served as an introductory debate ahead of an own-initiative report by Matthias Ecke (S&D, Germany).
During the session, the experts highlighted significant costs caused by fragmentation due to differing taxation regimes in the financial sector, particularly concerning various VAT exemption systems, financial transaction taxes (FTTs), bank levies, and new forms of windfall profit taxation.
They gave an overview of financial sector tax measures in the EU and beyond, advocating for cautious harmonisation. Experts stressed that such taxes should have the broadest possible base to minimise avoidance and profit shifting, applied at low rates, and remain temporary due to limited evidence on their impact.
MEPs and researchers warned that financial sector taxes might be passed on to consumers. Doubts were also raised about the political willingness to achieve full harmonisation, favouring a step-by-step approach, and highlighted new challenges like cryptocurrencies.
The EP’s ECON Committee met to discuss its draft report on the Business in Europe: Framework for Income Taxation (BEFIT), prepared by MEP Evelyn Regner (S&D, Austria).
Regner’s main changes to the Commission’s proposal include:
Overall, during the hearing, there was broad support for the EC proposal, although the debate showed differences in how far the EP should go in terms of tax harmonisation.
ECON Committee is currently scheduled to vote on the draft report on 24 September, followed by a plenary vote on 12 November. BEFIT remains, however, stuck in the Council with little to no progress in sight.
The EP’s ECON Committee discussed the draft report on the revision of the EU’s Energy Tax Directive (ETD), prepared by MEP Johan Van Overtveldt (ECR, Belgium).
Political groups agreed on the need to revise the ETD, but had divergent opinions on how the revision should be carried out.
ECON is scheduled to vote on the draft report on 5 November, followed by a final plenary vote on 15 December. As always, the EP only provides its non-binding opinion, whilst the Council continues its work on the file (see article below).
MEP Ľudovít Ódor’s (RE, Slovakia) draft report on the VAT in the digital age (ViDA) was published on 13 June.
As the Council reached an agreement on the ViDA proposal some months ago, it asked the EP – whose non-binding opinion is needed for such tax proposals – to provide a new opinion based on the Council’s agreement which differs in significant parts from the original EC proposal.
MEP Ódor, in his draft report, recommends that the EP endorse the Council’s agreement to enable swift adoption into EU law. A plenary vote to adopt the draft report is currently scheduled for 7 July, after which the EC can publish the ViDA agreement in the EU Official Journal.
The EP and the Council agreed on 18 June on the changes to the Carbon Border Adjustment Mechanism (CBAM). These changes are part of the “Omnibus I” simplification package presented in February, which aims to simplify existing legislation in the fields of sustainability and investment.
The co-legislators supported a new de minimis mass threshold whereby imports up to 50 tonnes per importer per year will not be subject to CBAM rules. It replaces the current threshold exempting goods of negligible value. The new threshold exempts the vast majority (90%) of importers − mainly small and medium-sized enterprises and individuals − who import only small quantities of CBAM goods. The climate ambition behind the mechanism remains unchanged, as according to EC estimates 99% of total CO2 emissions from imports of iron, steel, aluminium, cement and fertilisers will still be covered by the CBAM. The co-legislators included safeguards to ensure this figure and to prevent circumvention of the rules.
Co-legislators also agreed on changes to simplify imports covered by the CBAM such as the authorisation process, the calculation of emissions and verification rules as well as the financial liability of authorised CBAM declarants, while strengthening anti-abuse provisions.
As a next step, the provisional agreement must be endorsed by the Council and the EP before formal adoption, expected by September 2025.
FISC Committee debated on 25 June the proposed amendments to their draft report on the role of simple tax rules and tax fragmentation in European competitiveness. The work on the draft report is led by MEP Michalis Hadjipantela (EPP, Cyprus).
The debate centred around the compromise amendments, many of which have already been agreed by the rapporteurs, and all MEPs that took the floor indicated their support for the direction of the final text.
A vote in ECON Committee is currently scheduled for 15 July, followed by a final plenary vote on 8 September.
At the workshop, MEPs and experts highlighted that the rise in remote and cross-border work creates legal uncertainties, particularly around tax liabilities and social security contributions.
The absence of a unified EU tax framework leads to burdensome compliance costs and administrative complexity for both workers and employers. The panellists stressed the need for coordinated solutions, including potential harmonisation measures, simplified processes, and better information exchange to support labour mobility while respecting national sovereignty.
The progress report gives an overview of the Council’s work on the Energy Tax Directive (ETD) revision from the past 6 months. In short, member states still need to align their positions, which is difficult since the file requires unanimous approval.
The Polish Council presidency considers that energy-intensive sectors, such as mineralogical and metallurgical processes, need more support considering the EU’s ambitious objectives. Therefore, according to the presidency, allowing member states to continue to give support in the form of an exclusion from the scope of the ETD is justified.
The note indicates several other aspects of the ETD where future Council presidencies will need to find compromises. Thus, no immediate Council agreement on ETD revision should be expected, despite the EP advancing on its own work on a non-binding opinion (see article above).
The Polish presidency published a broader note indicating work achieved on several tax files in the past 6 months:
The Polish presidency published a final overview report on 13 June, outlining the Council’s progress on identifying new EU own resources.
The Polish presidency encourages the Commission and the Council to continue exploring alternative revenues for the EU budget. The Commission revealed that the own resources package currently blocked by the Council would be adapted, “with new proposals”, as part of the proposal for the next post-2027 Multiannual Financial Framework (MFF), expected for 16 July. The proposals under consideration are:
Denmark will assume the EU Council’s 6-month rotating presidency from Poland in July and has outlined its priorities for the term. In the area of taxation, Denmark plans to focus on the following:
Denmark’s Council Presidency will run until December, after which Cyprus will take over from January 2026 onward.
European Parliament
Study on the taxation of the EU’s financial sector
European Parliament
Study on tax barriers and cross-border workers: tackling the fragmentation of the EU tax framework
European Parliament
Report on tax challenges facing the EU defence union
Council
Code of Conduct Group's report on work progress
