The Dutch Federation of Pension Funds (Pensioenfederatie) has welcomed the European Commission’s Tax Omnibus and urged the Council and the European Parliament to support it, to help advance the EU’s Savings and Investments Union (SIU).

Yesterday, 24 June, the European Commission adopted a tax simplification package designed to simplify EU tax rules and reduce compliance burdens for businesses.

The package comprises two proposals, the Taxation Omnibus and the Recast of the Directive on Administrative Cooperation (DAC).

The package aims to modernise the EU's direct tax framework and improve the competitiveness of the single market while maintaining the level of protection against tax fraud, evasion and avoidance.

The package is expected to save EU businesses around €8bn annually.

The Omnibus on Direct Taxation, in particular, is designed to make cross-border investing and financing easier within the EU.

The key measures include introducing an exemption from withholding taxes on dividends, interest and royalty payments between EU companies, removing unnecessary restrictions on genuine third-party and market financing, and simplifying overlapping tax rules.

According to Pensioenfederatie, the Tax Omnibus supports the objectives of the SIU, and the simplification proposals will help ensure that pension funds, as major investors, no longer pay withholding tax on dividends.

It said that this will, in turn, make investments in European stock markets more attractive.

It also said the proposal treats pension funds fairly and is in line with OECD policy that pension entitlements, including pension fund investments, are not taxed, but tax is paid when pension benefits are received.

The package has been submitted to the European Parliament for consultation and the Council for adoption.

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