Patrick Schrievers
Neha MohanBackground
On 22 May 2026, the European Commission (“EC”) announced that it intends to publish its ‘Taxation Omnibus’ on 24 June 2026. Since Q4 2025, the EC has been working on a proposal for an ‘Omnibus’ to simplify rules and reduce bureaucracy in the area of taxation. In February 2026, the EC opened a public consultation for enhancing, clarifying and streamlining the corporate tax directives: the Interest and Royalties Directive[1], the Tax Merger Directive[2], the Parent-Subsidiary Directive[3], the Anti-Tax Avoidance Directive[4] and the Tax Dispute Resolution Mechanisms Directive[5].
In the EC’s own words, the intention of the ‘Taxation Omnibus’ is “to simplify existing rules and reduce compliance costs for taxpayers, thereby contributing to the functioning of the EU internal market and its competitiveness.” In the media and among tax professionals, there has been much speculation about the exact content of the proposal. For instance, the Financieele Dagblad of 5 June 2026 led with a message for Dutch business: Alongside a package of measures to promote innovation, the EC also wants companies to be able to deduct more interest (“Europese Commissie wil bovendien dat bedrijven meer rente kunnen aftrekken”).
Based on a leaked draft of the proposal (that we haven’t seen ourselves), the Taxation Omnibus may impact the Dutch taxpayer in the following ways: (i) limiting the scope of earnings stripping rules in Article 15b Wet op de vennootschapsbelasting 1969 (Corporate Income Tax Act 1969; “CITA”). and, de facto, allowing taxpayers to deduct more interest, (ii) introducing an R&D allowance designed to ensure that certain R&D investments are deductible for CIT purposes, and (iii) enabling MNEs to more easily apply for exemptions from withholding taxes on dividend, interest and royalty payments within the EU.
If the rumours surrounding the Taxation Omnibus proposal are true, the impact on the (direct) tax legislation in the Netherlands could be significant. Once the proposal is disclosed (most probably on 24 June 2026), we will set out an impact- analysis in a series of blog posts.
Taxation Omnibus proposal
The Taxation Omnibus proposal forms part of the EC’s initiative to streamline, enhance and clarify the corporate tax directives (i.e., the Interest and Royalties Directive (“IRD”), the Merger Directive, the Parent-Subsidiary Directive (“PSD”), the Anti-Tax Avoidance Directive (“ATAD”) and the Tax Dispute Resolution Mechanisms Directive (“DRM”)) with the aim of supporting the competitiveness of the EU. The EC estimates that so-called Taxation Omnibus measures could reduce the cost of CIT-compliance across the EU by some EUR 7 billion. The EC acknowledges that the existing framework was designed to set minimum standards against tax avoidance, but argues that circumstances have changed. The new provisions are intended to address competitiveness issues arising from the fragmentation of national research and development (“R&D”) tax regimes, which in the view of the EC often leaves the EU at a disadvantage relative to its main international trading partners.
A new R&D-allowance?
We have not seen the leaked proposal itself, which is expected to be made public on 24 June 2026. Based on the reporting in the Financieele Dagblad of 5 June 2026, it is nonetheless possible to shed some light on what lies ahead. The EC wants to make expenditure on R&D more attractive for tax purposes, so that Europe can compete more effectively with its principal trading partners. To this end, it proposes a new R&D allowance designed to ensure that certain R&D expenditure is fully deductible for CIT purposes. This would cover factories, machinery and other physical assets that are used directly for, or that support, R&D activities. The wider context is that the global minimum tax for MNEs leaves room for fiscally favourable R&D incentives, which many Member States do not yet operate and which ATAD has so far made difficult to introduce.
The Netherlands’ robust implementation of Article 4 ATAD
According to reporting in the Financieele Dagblad, it also appears that, among other things, the EC wishes to ease the rules related to interest deduction, making it easier for companies to borrow. The earnings stripping rule in Dutch law (Article 15b CITA) derives from Article 4 ATAD. Because ATAD is a Minimum Harmonisation Directive, it permits Member States to apply a stricter, more restrictive provision. Article 3 of the ATAD directive, entitled “Minimum level of protection”, provides that, “this Directive shall not prevent the application of national or treaty provisions designed to preserve a higher level of protection of national corporate tax bases.” [6] The Netherlands made use of this discretion when implementing the earnings stripping rule.
Whereas under Article 4 ATAD, Member States may: (i) treat entities within a group or tax consolidation as a single taxpayer[7]; (ii) allow a deduction of exceeding borrowing costs up to EUR 3,000,000 (the minimum threshold)[8]; (iii) grant a full deduction of exceeding borrowing costs for a stand-alone entity (the stand-alone entity exception)[9]; (iv) exclude exceeding borrowing costs arising from loans concluded before 17 June 2016, provided these have not been substantially amended[10]; (v) exclude exceeding borrowing costs arising from loans financing a long-term public infrastructure project, where the operator, the borrowing costs, the assets and the income are all located within the Union (the public infrastructure exception)[11]; and (vi) allow a full or higher deduction of exceeding borrowing costs where the taxpayer forms part of a consolidated group and meets the prescribed equity ratio test, subject to two conditions (the group ratio exception)[12], the Netherlands has not transposed (any of) these provisions into Article 15b CITA. In addition, in most Member States, third-party loans fall outside the interest deduction limitation, whereas the Netherlands includes such loans when applying the cap of EUR 1,000,000 or 24.5% of EBITDA.
Does minimum harmonisation permit the Dutch approach?
The option for Member States, provided for in Article 3 ATAD, to apply national provisions aimed at preserving a higher level of protection of national corporate tax bases cannot exempt them from the obligation to transpose Article 4 ATAD into their respective legal systems.[13] In that regard, it follows from settled case-law that, while minimum harmonisation does not prevent Member States from maintaining or adopting stricter measures, those measures must not be such as to seriously compromise the result prescribed by ATAD in question and must comply with the TFEU.[14],[15] Furthermore, such national provisions cannot be contrary to the obligations incumbent on Member States under the provisions of a directive which provides only for minimum harmonisation.[16]
In this regard, in recitals 2 and 16 ATAD, it is stated that in order to ensure the proper functioning of the internal market and to improve its overall resilience to cross-border tax avoidance practices, only a common framework and corrective measures at EU level can achieve that objective in a sufficiently consistent and coordinated manner, preventing market fragmentation and putting an end to the asymmetries and market distortions that currently exist, in particular cross-border problems, while providing taxpayers with legal certainty. As specified in recital 16, in accordance with the principle of proportionality set out in Article 5 TFEU, ATAD aims only to achieve the minimum level of coordination within the Union necessary to achieve these objectives.[17]
In this context, the ECJ observed in Commission v Belgium (C-524/23) that ATAD aims to strike a balance between the objective of combating tax avoidance practices and the objective of preventing the creation of further barriers to the internal market, such as double taxation. That concern for balance reflects the EU legislature’s consideration of the principle of proportionality, which requires that the means employed by a provision of EU law be appropriate for achieving the legitimate objectives pursued by the legislation concerned and not go beyond what is necessary to achieve them.[18]
In connection to existing case-law, Commission v Belgium (C-524/23), sharpens the question whether the ‘robust’ manner in which the Netherlands has implemented Article 4 ATAD strikes the balance the directive itself pursues: combating tax avoidance practices, on the one hand, and not creating barriers to the proper functioning of the internal market, on the other. Put concretely: When transposing the earnings stripping rule into Article 15b CITA, was the Netherlands permitted to impose a stricter threshold, to bring third-party interest within scope, to apply stricter thresholds, to omit the optional exceptions altogether? We would expect questions of this kind to occupy the courts in the coming years.
How the Taxation Omnibus could shift the balance
Interestingly, the Taxation Omnibus may already shift the existing balance between these objectives. Following the reporting in the Financieele Dagblad, it is rumoured that, under the Omnibus, Member States will no longer be permitted to restrict the deduction of interest beyond the (mandatory) EU-wide limits. While this remains speculative, it is conceivable that, in the context of the earnings stripping rule, what is today minimum harmonisation, a floor that Member States are free to exceed, could de facto become maximum (or “mandatory”) harmonisation. Were that to happen, the potential “overkill” in Article 15b CITA may be curtailed and, in time, resolved, a trajectory that could begin once the Taxation Omnibus proposal is published, currently expected on 24 June 2026.
This would change the way the earnings stripping rule operates significantly. The reporting in the Financieele Dagblad sheds some light on this. It suggests that the proposals could introduce several carve-outs from the deduction limitation. Loans taken out with banks or other third parties that are not on-lent within a group would be excluded, and loans entered into by companies involved in infrastructure projects may fall within the exception[19], so that the interest could be deducted without limitation; for defence companies, the same treatment would apply for the first five years.
Alongside this widening of the interest deduction, the reporting in the Financieele Dagblad mentions that the EC intends to allow subsidiaries of multinationals established in the EU to qualify more easily for exemptions from withholding taxes on dividends, interest and royalty payments. Once the Taxation Omnibus proposal is disclosed on 24 June 2026, we will set out its impact on the various EC directives in a series of blog posts.
[1] Council Directive 2003/49/EC of 3 June 2003 on a Common System of Taxation Applicable to Interest and Royalty Payments Made between Associated Companies of Different Member States, OJ L157 (2003).
[2] Council Directive 2009/133/EC of 19 October 2009 on the Common System of Taxation Applicable to Mergers, Divisions, Partial Divisions, Transfers of Assets and Exchanges of Shares Concerning Companies of Different Member States and to the Transfer of the Registered Office of an SE or SCE between Member States (Codified Version), OJ L310 (2009).
[3] Council Directive 2011/96/EU of 30 November 2011 on the Common System of Taxation Applicable in the Case of Parent Companies and Subsidiaries of Different Member States (Recast), OJ L345 (2011).
[4] Council Directive (EU) 2016/1164 of 12 July 2016 Laying Down Rules against Tax Avoidance Practices That Directly Affect the Functioning of the Internal Market, OJ L193 (2016).
[5] Council Directive (EU) 2017/1852 of 10 October 2017 on Tax Dispute Resolution Mechanisms in the European Union, OJ L265 (2017).
[6] Council Directive (EU) 2016/1164 of 12 July 2016 Laying Down Rules against Tax Avoidance Practices that Directly Affect the Functioning of the Internal Market (ATAD), OJ L 193, 19.7.2016, recital 12 “(…) In order to ensure a high level of protection, Member States could lower the control threshold or use a higher threshold by comparing the actual corporation tax and the corporation tax that would have been levied in the taxpayer’s Member State. When transposing CFC rules into their national law, Member States could apply a sufficiently high fractional tax rate threshold. (…)”.
[7] Art. 4(1), second subparagraph, points (a) and (b) ATAD.
[8] Art. 4(3)(a) ATAD.
[9] Art. 4(3)(b) ATAD.
[10] Art. 4(4)(a) ATAD.
[11] Art. 4(4)(b) ATAD.
[12] Art. 4(5) ATAD.
[13] ECJ, 26 February 2026, Case C-524/23, Commission v Belgium (Directive 2016/1164), EU:C:2026:111, para. 83.
[14] Commission v Belgium (C-524/23), para. 84.
[15] It is also clear from the Court’s case-law that Member States cannot, by definition, maintain or adopt such stricter measures in relation to matters exhaustively regulated by such a directive. See judgment of 18 January 2024, Regionalna direktsia ‘Avtomobilna administratsia’ Pleven, C-227/22, EU:C:2024:57, para. 38
[16] Commission v Belgium (C-524/23), para. 85. See, to that effect, judgments of 22 May 2003, Commission v Netherlands, C-441/01, EU:C:2003:308, para. 46, and of 17 October 2018, Commission v United Kingdom, C-503/17, EU:C:2018:831, para. 55.
[17] Commission v Belgium (C-524/23), para. 90.
[18] Commission v Belgium (C-524/23), para. 93. See, to that effect, judgment of 3 December 2019, Czech Republic v Parliament and Council, C-482/17, EU:C:2019:1035, para. 76.
[19] This would align with the objections raised by Netherlands-based property development companies.
