Press remarks by Commissioner Dombrovskis and Commissioner Hoekstra on omnibus proposals on taxation and on energy product legislation

Commissioner Dombrovskis

Today, we are presenting our latest Omnibus simplification proposals in two important areas.

The first – on taxation – cuts red tape for both taxpayers and tax administrations.

The second – on energy products – simplifies rules for suppliers and dealers without compromising on providing necessary information to customers.

Taken together, they will deliver an additional €3.4 billion in annual administrative cost savings for businesses and administrations across Europe.

This brings the total savings from our omnibus proposals and other simplification proposals to over €18 billion.

That is almost half of our overall target of €37.5 billion by the end of the Commission's current mandate.

Beyond the headline numbers are the real changes that simplification brings about.

We are cutting red tape to make things easier.

Easier for our businesses to do business.

Easier for our farmers to farm.

Easier for our innovators to innovate.

Because when businesses and citizens are free to focus on what they do best, everyone wins.

Before Wopke provides more details on the two proposals that make up the taxation Omnibus package,

I will provide a broader overview of today's two Omnibus proposals.

Firstly, on taxation.

Over the years, the EU's direct tax framework has delivered real progress. 

But some rules have become outdated.

Others overlap with more recent legislation.

And many have been implemented in divergent ways across Member States.

Our proposals directly address all three issues.

The Tax Omnibus amends six corporate tax directives.

And the proposal for a recast of Directives on administrative cooperation codifies nine legal acts into a single framework.

We are reducing obstacles to cross-border investment and economic activity and advancing our regulatory deep cleaning agenda.

It will help to strengthen the EU's Single Market, and deliver the Savings and Investments Union.

The proposals are built on intensive engagement with all Member States and businesses of all sizes.

They will reduce overall compliance costs by approximately €8 billion each year,

With €3.3 billion coming from annual administrative cost savings,

And over €4.6 billion from additional compliance and financial costs savings.

In doing so, they are making Europe a more attractive and easier place to invest, innovate, and do business.

In other words, making Europe more competitive, without compromising on what matters most: preserving essential safeguards against tax avoidance and evasion.

Moving now to energy products.

We are proposing targeted revisions to regulations on energy and tyre labelling, bringing about €100 million of administrative savings.

These regulations ensure customers are provided with information on energy efficiency, recyclability, and noise.

This enables customers to make informed purchasing decisions.

Today's proposals do not change or undermine this objective in any way.

Let me give you three examples:

Firstly, product information sheets that provide dealers with additional technical information will become digital, while keeping the possibility to request printed labels.

Secondly, suppliers will benefit from a once-only principle.

When products are registered in the European Product Registry for Energy Labelling, this information will be shared automatically across EU registries, eliminating duplicate reporting.

And thirdly, we are empowering market surveillance authorities to make detecting and tackling non-compliant products imported from third countries easier and faster.

As with all our proposals, these revisions are grounded in extensive consultations

Finally, allow me to provide a brief recap of where we stand with our simplification agenda.

In today's increasingly challenging and fragmented world, Europe must put its house in order.

Our prosperity and security depend on it.

The European Commission is playing its part, having now tabled 12 Omnibus simplification packages.

We must advance the pending simplification legislative files with an ambition that matches the Commission's original proposals.

The world will not wait for Europe to do what it must to secure its long-term prosperity.

We must act with urgency and ambition.

We must deliver.

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Commissioner Hoekstra

Ladies and gentlemen, a very good afternoon,

If there is one thing crystal clear to the Commission, it is that we need to advance our business climate.

Businesses want action.

Companies across the EU are calling for a regulatory environment that is simpler, faster, and smarter—one that enables them to thrive and makes the EU more competitive on the global stage.

This is why, today, we are coming with an ambitious package to simplify taxation rules, reduce unnecessary burdens, and make the EU more attractive for investment and growth.

We are talking here about saving an estimated EUR 8 billion every single year.

This is about making taxation simpler.

But if you zoom out, this is also about the competitiveness of our Single Market.

Let me focus on the package on the table today, as Valdis has already discussed how this package fits with our simplification agenda.

There are two proposals:

First, the Direct Taxation Omnibus will modernise the EU's direct tax framework, making it simpler, more effective and better adapted to today's economic environment.

But of course, we are upholding strong safeguards against tax avoidance and evasion.

What does this mean in practical terms?

We are removing withholding tax barriers and burdensome procedures for cross-border payments of interests, royalties, and dividends between companies in the EU. This will make it easier for businesses to invest and operate across the EU.

Let me give you an example: a company paying royalties to its entity in another Member State will now be exempt from paying withholding tax on that cross-border payment within the EU. No more lengthy upfront procedures. No need to deal with complex, cumbersome refund procedures anymore that sometimes take years to complete.

We're also helping businesses get the financing they need by simplifying and updating the interest limitation rule.

Here again, examples are better. A company taking a bank loan to buy equipment, hire staff or invest in innovation will be able to deduct the full amount of interest. We're adapting the threshold to avoid unnecessary restrictions for smaller companies.

We are also simplifying EU tax rules to reflect the global minimum tax (Pillar 2). These rules help stop profit shifting and in-scope multinational enterprises already face close scrutiny, and rightly so, from national tax authorities.

For example, multinational enterprises within the scope of Pillar 2 will be relieved from applying rules related to low-taxed controlled foreign companies as both rules achieve mainly the same outcome.  

Second, on the recast of the Directive on Administrative Cooperation (DAC).

The DAC is the main framework for the automatic exchange of information across the EU  – in our experience, it's a critical instrument in the fight against tax fraud, evasion, and avoidance.

The recast will clarify, simplify and improve the legal framework for administrative cooperation and exchange of information in the EU.

We are taking very concrete measures.

First, instead of having 9 different legal texts, we will have only one single text.

Second, we are removing the obligation to report cross-border tax arrangements that are of limited value for tax administrations.

Third, we are increasing the reporting threshold for online sales of goods.

This is very concrete and directly impacts citizens.

Imagine that you are selling second-hand baby clothes on an online platform.

Before the recast, as soon as you sold 30 pairs or more of baby pyjamas, the platform had to report your information to the tax authorities.

Now, the platform only has to do it once you sell items worth more than 3000 euro per year, which is a different type of benchmark. This is great news and good for the circular economy.

We are improving the way the DAC works by ensuring that more information is shared and improving the identification of taxpayers.

Taken together, these simplifications and improvements will make cooperation between tax authorities more effective, easier while ensuring that public resources are used more efficiently.  

Ladies and gentlemen,

In our view, today's simplification package sends a clear message:

Europe is serious about competitiveness, making it easier for our businesses to grow, invest and succeed on its soil.

This is an important step but certainly not the last. And we will continue with this endeavour.