EY Poland’s analysis of the EU Tax Omnibus proposal published on 28 October 2026 examines the European Commission’s package aimed at reducing compliance burdens for cross-border businesses. The draft directive proposes amendments to the Parent-Subsidiary Directive, Interest Limitation Rule, Anti-Tax Avoidance Directive (ATAD) CFC rules, and the Merger Directive. Key changes include raising the de minimis threshold for withholding tax (WHT) exemptions, simplifying CFC reporting for low-risk entities, and aligning interest limitation calculations across member states. The proposal targets implementation from 2027, pending Council and Parliament approval.
Key Takeaways
- WHT Simplification: Introduction of a unified EU-wide WHT exemption certificate and increased de minimis thresholds for dividend/interest/royalty payments between associated enterprises.
- CFC Rule Relief: Entities with low accounting profits or substantive economic activity may qualify for streamlined CFC reporting, reducing documentation for holding companies.
- Interest Limitation Alignment: The proposal harmonizes the EBITDA-based interest deduction cap (30%) and carries forward/back rules, reducing double taxation risks in cross-border financing.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement