Skip to content
DRAFT REPORT (2024/2118(INI))

On the role of simple tax rules and tax fragmentation in European competitiveness

ECON-PR-770261

Committee on Economic and Monetary Affairs · Rapporteur: Michalis Hadjipantela

Official HTML ↗ PDF DOCX
✦ In shortFull text
✦ In short · AI summary of this text, generated 4 Sept 2026

Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

This draft report on the role of simple tax rules and tax fragmentation in European competitiveness calls for simplifying tax systems, reducing administrative burdens, and enhancing cooperation among member states. It urges the Commission to conduct impact assessments, simplify VAT, support digitalisation, and address tax barriers for cross-border workers and innovation.

Committee position. The rapporteur proposes a resolution calling for tax simplification, digitalisation, and cooperation to enhance competitiveness, while respecting member states' tax sovereignty.

Key points

  1. Emphasises that simple and predictable tax rules should ease compliance for taxpayers and administration for governments, creating a compliance-friendly and business-supportive EU.
  2. Stresses that EU tax rules must respect subsidiarity and proportionality, allowing member states to tailor systems to national needs while adhering to common standards.
  3. Notes SMEs face high administrative burdens from complex and fragmented tax rules; urges the Commission to explore simplification and reduce compliance costs.
  4. Welcomes European Council conclusions on competitiveness and tax decluttering; regrets omission of taxation as a key factor; calls for better tax cooperation and reduced fragmentation.
  5. Calls on the Commission to conduct ex ante impact assessments and competitiveness checks on tax proposals, aiming to reduce reporting requirements by 25% (35% for SMEs).
  6. Urges promotion of digitalisation and AI in tax administration to cut compliance costs, and calls for assessment and simplification of the VAT framework to reduce the VAT gap.
  7. Reiterates commitment to OECD Pillar II, but urges the Commission to protect EU interests given the US Executive Order; calls for legal clarity and finalisation of administrative guidance.
  8. Notes the Commission will evaluate the Anti-Tax Avoidance Directive in light of Pillar II and report in Q3 2025.
  9. Highlights that fragmented tax systems create obstacles to cross-border investment and double taxation; calls for addressing these barriers.
  10. Commits to fighting aggressive tax planning, urging improved cooperation, information exchange, and coordinated audits; calls for enhanced collaboration between EPPO and Eurofisc against VAT fraud.
  11. Calls for a study on simplifying tax rules for cross-border workers and self-employed, and for studies on R&D tax incentives to boost competitiveness.

Who is affected

  • Small and medium-sized enterprises (SMEs) face high compliance costs; the report urges simplification to reduce their burden.
  • Cross-border workers and the self-employed are affected by tax fragmentation and double taxation; the report calls for a study.
  • Multinational groups under Pillar II need legal clarity and certainty in implementation.

Figures and deadlines

  • Reporting requirements reduction target of 25%, and at least 35% for SMEs.

Legal basis: Article 4 and Articles 63 to 66 of the Treaty on the Functioning of the European Union; Articles 113, 114 and 115 TFEU.