On June 24, 2026, the European Commission (“Commission”) published the EU Tax Simplification Package representing the most comprehensive review of the EU direct tax framework to date. The package marks a significant shift in EU tax policy: moving away from an era defined by anti-avoidance measures and towards a focus on competitiveness, simplification and reducing administrative burdens for businesses operating across the single market.
The policy impetus for this shift can be traced to two key documents: the Draghi Report (September 2024) and the European Commission’s Competitiveness Compass (January 2025). The Competitiveness Compass is centred on three pillars, closing the innovation gap, a joint decarbonisation and competitiveness plan, and increasing security and reducing dependencies, with simplification of rules and reduction of administrative burdens identified as one of five horizontal enablers of competitiveness. The Commission has set a target of reducing administrative