Simplifying the European taxation framework

The European Round Table for Industry (ERT) strongly supports the European Commission’s efforts to simplify EU legislation with respect to taxes. At a time of slow economic growth and intensifying global competition, the EU must place business competitiveness at the centre of its policy agenda. With the Omnibus on Taxation expected in spring 2026, the ERT sees a critical opportunity to reduce administrative burdens, simplify the tax framework, and transform taxation from a compliance challenge into a strategic asset for the European economy, while remaining aligned with the EU’s objectives of fair, effective, and competitive taxation.

In a challenging economic environment around the world, tax policy must also be recognised as a geopolitical tool. Global competitors – notably the United States and China – use tax frameworks strategically to attract investment, support innovation, and strengthen industrial leadership. The EU must adopt a similar mindset, using its tax system to secure its economic relevance and support investment in the sectors of tomorrow.

Over the past decade, a multitude of new regulatory measures has significantly complicated the corporate tax landscape, limiting the advantages of the EU Single Market. Therefore, it is crucial that simplification efforts avoid creating new layers of complexity. While initiatives such as the Directive on Administrative Cooperation (DAC), Anti-Tax Avoidance Directive (ATAD) and Pillar 2 of the OECD may have been justifiable in isolation, their cumulative effect has created a stifling compliance burden for European companies operating across borders. Fragmentation, overlapping rules, divergent national interpretations, and extensive reporting obligations divert resources away from jobs, investment, and innovation. ERT therefore calls for a comprehensive review of the total compliance burden created by EU corporate tax legislation and a rebalancing towards growth and competitiveness, in line with the Draghi Report’s warning against growth-inhibiting fragmentation.

The recommendations are outlined in our paper attached.