CFE Statement on the Direct Tax Omnibus
CFE Opinion Statement FC 6/2026
CFE welcomes the Commission’s objective of simplifying the EU direct tax framework while maintaining effective safeguards against tax avoidance and supports adoption of the Direct Taxation Omnibus at no less than the level of ambition proposed.
The Statement sets out targeted recommendations aimed at ensuring the proposals deliver meaningful simplification in practice. CFE supports retaining the exclusion for genuine third-party borrowing under the ATAD interest limitation rules and recommends reducing the Parent-Subsidiary Directive ceiling for the flat-rate treatment of management costs from 5% to 1%.
CFE also calls for the proposed extension of the GAAR to Pillar Two top-up taxes to be reconsidered until the OECD’s work on targeted anti-abuse rules has concluded and supports the proposed CFC carve-out for groups within the Pillar Two framework. The Statement also seeks greater clarity concerning the treatment of existing national R&D incentives.
Finally, CFE calls for reconsideration of the proposed 2037 timeline for eliminating withholding taxes on dividends, interest and royalties, inviting the EU legislator to consider whether earlier implementation could be achieved through a phased approach.
