The European Union will propose a tax simplification plan on June 24, 2026, aimed at reducing bureaucracy and cutting business compliance costs by €7 billion annually [1, 2]. The plan includes broadening withholding tax exemptions to cover more companies and introducing an EU-wide research and development (R&D) allowance open to any company in the bloc [1, 2].
Both small and medium-sized enterprises and large companies would benefit from exemptions from parts of the EU's anti-tax avoidance rules [1, 2]. Specifically, exempting large companies from controlled foreign company rules is expected to save €160 million each year [1]. The proposal also exempts the EU's defence industry from borrowing costs [1, 2].
To reduce paperwork, the proposal would shift from requiring prior approval for tax exemptions to relying on self-assessment and audits [1]. This change aims to streamline processes and lower administrative burdens for businesses.
The European Commission declined to comment on the proposal [1, 2]. The tax simplification plan requires unanimous approval by all EU member states before becoming law [1, 2].
Preparations for this draft began in early June 2026, with the EU Commission aiming to present the proposed measures officially on June 24 [1, 2].
