EU Tax Alert 215

CJ Advocate General opines on application of the anti-abuse rule under the Parent‑Subsidiary Directive 

(Case C‑203/25)

On 21 May 2026, Advocate General Kokott delivered her Opinion in NEO Group (C‑203/25), concerning the scope of the anti‑abuse rule under the Parent‑Subsidiary Directive (Directive 2011/96/EU) in relation to dividend withholding tax exemptions. In this case the Advocate General clarifies that, as a rule, the application of the Parent‑Subsidiary Directive cannot be denied where dividends are distributed to a parent company that is both the beneficial owner and engaged in genuine economic activity. However, in exceptional circumstances, a finding of abuse remains possible where the dividend flow forms part of an overall non‑genuine arrangement.

CJ Advocate General opines on denial of tax consolidation-linked benefits where the parent falls outside national tax sovereignty does not breach the freedom of establishment

(Case C-592/24)

On 26 March 2026, Advocate General Kokott delivered her opinion in Société Générale and Others (C-592/24). The case concerns the scope of the freedom of establishment under Articles 49 and 54 TFEU in the context of the Italian group taxation regime and the deductibility of interest payments. The Advocate General concludes that Articles 49 and 54 TFEU do not preclude the Italian group taxation rules, because the unequal treatment does not arise from the parent company being established in another Member State but from the fact that the controlled shareholdings are not subject to Italian tax sovereignty. In addition, the Advocate General concludes that EU law does not require Member States to grant group taxation retroactively or without an application, even where the regime was previously unavailable due to national rules potentially incompatible with EU law.  

European Institutions plan agreement on ‘Omnibus on taxation’ by end of 2027

In April 2026, it was announced that representatives of the European Commission, the European Parliament and the Council of the European Union aim to reach an agreement on the proposed ‘Omnibus on taxation’ package by the fourth quarter of 2027. The legislative proposal underlying the Omnibus package is expected to be adopted by the European Commission on 24 June 2026.

It is anticipated that the proposal will address key elements of the current EU tax framework, including the Parent-Subsidiary Directive, the Interest and Royalties Directive, the Merger Directive, the Anti-Tax Avoidance Directive and the Tax Dispute Resolution Directive.  

VAT fraud; EU Council agrees to strengthen cooperation with EU investigative bodies

The Council of the EU has reached a provisional agreement on new rules to strengthen the fight against VAT fraud by enhancing cooperation between Member States, the European Public Prosecutor's Office (EPPO), and the European Anti-Fraud Office (OLAF).

As a next step, the European Parliament is expected to adopt its opinion on the file in July 2026. Following that opinion, the Council will formally adopt the new rules which will subsequently enter into force twenty (20) days after their publication in the Official Journal of the EU.

E-commerce: EUR 3 flat-rate customs duty

As of 1 July 2026, new customs duty rules will apply to low-value goods imported via e‑commerce. Following the removal of the EUR 150 customs duty exemption threshold, goods contained in consignments with an intrinsic value not exceeding EUR 150 will become subject to customs duties. A simplified EUR 3 flat-rate customs duty will apply per item for low-value distance sales. Where a parcel contains different categories of goods, the customs duty will be levied separately on each category of goods.

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