EU Commission launches a proposal to simplify corporate taxation

The package focuses on streamlining legislation that has become increasingly complex following years of anti-tax avoidance measures and the introduction of the OECD’s Pillar Two framework. Among the areas under review are the Parent-Subsidiary Directive, the Interest and Royalties Directive, the Merger Directive, the Anti-Tax Avoidance Directive (ATAD) and the Tax Dispute Resolution Mechanisms Directive.

A key objective is to remove unnecessary overlaps between existing anti-abuse rules and the global minimum tax regime, while reducing administrative burdens for businesses operating across borders. The Commission also aims to simplify cross-border restructurings, improve legal certainty and make existing directives easier to apply in practice.

For businesses in Scandinavia, the proposal signals a welcome shift away from introducing new compliance obligations and towards a more coherent and proportionate framework. As the proposal advances, businesses should assess how the changes could enhance their tax positions, financing structures, and affect future reorganisations. Although the package is still at an early stage of the legislative process and will require unanimous approval by the Member States, it reflects a clear policy direction: maintaining robust anti-avoidance measures while improving the EU’s competitiveness through simplification. 

A separate proposal to recast the EU rules on administrative cooperation in tax matters (DAC) has also been published. The proposal aims to simplify and reduce reporting obligations, e.g., by introducing an exemption from DAC6 reporting for multinationals in scope of Pillar Two and by the removal of certain DAC6 hallmarks, to reduce the overall reporting burden.

We will continue to monitor the legislative process and provide updates as the proposal develops.