The European Commission has adopted a new Tax Package to support the European Union’s economic recovery and long-term growth. According to the Commission, the Package is built on the twin pillars of fairness and simplicity. The Package seeks to boost tax fairness, by intensifying the fight against tax abuse, curbing unfair tax competition, and increasing tax transparency. It focusses on simplifying tax rules and procedures which includes removing tax obstacles and administrative burdens for taxpayers.

The Tax Package is made up of three separate but related initiatives:

1. Tax Action Plan – presents 25 distinct actions to make taxation simpler, fairer and better attuned to the modern economy. These actions will remove obstacles from registration to reporting, payment, verification and dispute resolution. It will help Member States to harness the potential of data and new technologies, to better fight tax fraud, improve compliance and reduce administrative burdens.
2. Proposal on administrative cooperation (DAC 7) – extends EU tax transparency rules to digital platforms, so that those who make money through the sale of goods or services on platforms pay their fair share of tax too. This new proposal will ensure that Member States automatically exchange information on the revenues generated by sellers on online platforms.
3. Communication on tax good governance – focusses on promoting fair taxation and clamping down on unfair tax competition, in the EU and internationally. This includes a reform of the Code of Conduct, which addresses tax competition and tackles harmful tax practices within the EU. It also proposes improvements to the EU list of non-cooperative jurisdictions, which deals with non-EU countries that refuse to follow internationally agreed standards.

According to the Commission, the Package is the first part of a comprehensive and ambitious EU tax agenda for the coming years. The Commission will also work on a new approach to business taxation for the 21^st century, to address the challenges of the digital economy and ensure all multinationals pay their fair share.

In the context of the Green Deal, the Commission will make proposals to ensure that taxation supports the European Union’s objective of reaching climate neutrality by 2050. This multi-faceted approach to reforming taxation in the EU aims to make taxation fairer, greener and fit for the modern economy, thus contributing to long-term, sustainable, inclusive growth.

For more information visit the European Commission’s Tax Package webpage which includes a questions and answers document on the details of the Package.