The European Union announced a new tax reform package on Wednesday aimed at reducing regulatory burdens on businesses across the bloc.
The European Commission said the measures could save businesses up to €8 billion ($9.1 billion) in annual compliance costs if approved by EU member states.
The package includes the elimination of withholding taxes for intra-EU dividends, interest and royalty payments, along with simplified financing rules and the removal of duplicate reporting requirements. The proposals are part of a wider effort to make business operations easier within the EU and support industry growth.
The commission plans to cut reporting obligations by 25% overall and by 35% for small and medium-sized enterprises. The package combines a tax simplification bill with updated tax reporting and data sharing rules, which the commission said would generate approximately €3.3 billion in annual administrative savings and encourage cross-border investment within the single market.
"Europe needs simpler rules to deliver better results," Economy Commissioner Valdis Dombrovskis said in a statement.
The commission estimates that removing withholding taxes alone would provide savings and benefits worth €5.3 billion annually. An 8-year transition period is included before the new rules take effect, as many EU countries depend on withholding taxes for revenue.
The package would also remove certain reporting requirements on cross-border tax arrangements for large companies subject to the EU’s 15% corporate minimum tax regime.
Reporting thresholds for online sales platforms would be raised, eliminating reporting obligations for more than 10 million private sellers, particularly those selling second-hand goods.
The proposals require approval from all 27 EU member states, as tax legislation must receive unanimous support to be finalized.
Source: investing