Euro Tax Flash from KPMG's EU Tax Centre

On March 30, 2026, KPMG member firms in the EU submitted a response to the European Commission’s call for evidence on the upcoming Tax Omnibus proposal.

KPMG welcomes the European Commission's initiative to streamline, enhance and clarify the corporate tax directives and the Tax Dispute Resolution Mechanisms Directive, with the aim of supporting the competitiveness of the EU. KPMG supports the use of the Tax Omnibus as a catalyst for genuine simplification and modernization of the EU direct tax framework, particularly in light of Pillar Two and the need to preserve the EU’s global competitiveness.

KPMG also encourages the Commission to adopt a more ambitious, holistic tax simplification agenda, including tools to measure and manage tax complexity and compliance burdens over time.

On February 16, 2026, the European Commission (EC) launched a call for evidence on an “Omnibus on taxation”. The objective of the Tax Omnibus initiative is to simplify the existing EU legal direct taxation framework and boost competitiveness in the internal market, without undermining the objectives of the existing corporate tax Directives.

According to the call for evidence, key objectives of the initiative include:

• reducing unnecessary reporting and compliance burdens – the EC has committed to cutting the administrative burden by at least 25 percent for all businesses and by 35 percent for SMEs by the end of the mandate;
• eliminating outdated and overlapping tax rules;
• implifying tax legislation with the objective of improving the competitiveness of the internal market;
• clarifying concepts in tax legislation;
• streamlining and improving the application of tax rules, procedures and reporting requirements.

As part of the Tax Omnibus, the EC will review and potentially amend a number of key EU direct tax directives – notably the Anti‑Tax Avoidance Directive (ATAD), the Parent‑Subsidiary Directive (PSD), the Interest and Royalties Directive (IRD), the Merger Directive (TMD) and the Directive on Tax Dispute Resolution Mechanisms (DRM).

Interested parties were invited to submit their feedback until March 30, 2026. A legislative proposal is scheduled to be released in the second quarter of 2026, likely in June. For more information, please refer to E-News Issue 226.

 The EC received a total of 117 responses, including a response letter submitted by KPMG member firms in the EU¹.

KPMG member firms in the EU were pleased to provide comments to the European Commission’s public consultation on “Simplifying EU rules on direct taxation - omnibus”. KPMG’s response welcomes the initiative as an opportunity to simplify and modernize the EU direct tax framework, while highlighting a number of concrete recommendations.

Key points highlighted in the KPMG submission include the need to:

Broader policy considerations

KPMG encourages the Commission to go beyond the current exercise and pursue a more ambitious and holistic tax project taking into account other key areas of direct taxation (e.g., Pillar Two, tax incentives, tax implications of cross-border remote working arrangements), as well as the need for clear guidance and robust monitoring tools such as a tax simplification index. KPMG considers this essential to deliver a coherent, future-proof framework that is simpler, more predictable, and better aligned with the EU’s broader economic and policy objectives.

The upcoming Tax Omnibus initiative represents a timely opportunity to streamline and modernize the European Union’s direct tax framework. It should be noted, however, that any changes to the EU Directives require unanimous approval by EU Member States in the Council. The outcome of the Omnibus will therefore ne shaped through negotiations at the level of EU member states. Interested stakeholders should monitor opportunities to provide constructive feedback as the process progresses.

In parallel with the preparatory work on the Tax Omnibus, the Commission is working on the a recast of the Directive on Administrative Cooperation (Council Directive 2011/16/EU), which is expected to be published at the same time as the Omnibus. Please refer to E-News Issue 225 for the KPMG response to the DAC recast public consultation. 

Should you have any queries, please do not hesitate to contact KPMG’s EU Tax Centre, or, as appropriate, your local KPMG tax advisor.