ATOZ Insights: EU Commission’s initiatives in Direct Tax matters: State of play


  • Ongoing direct tax initiatives of the European Commission have not really evolved over the past 4 months and why we see more and more EU national Parliaments taking a very critical stand on the reforms proposed by the European Commission.
  • On 1 January 2024, Belgium took over the Presidency of the Council of the EU for the next six months. Belgium defined the adoption of the Faster and Safer Relief of Excess Withholding Taxes directive proposal, called “FASTER”, as a top priority and the chances of having this directive proposal formally adopted are rather high.

  • The proposal laying down rules to prevent the misuse of shell entities for tax purposes, called “Unshell”, is still ongoing 2.5 years after its release and there is still a big question mark on its chances to succeed. The related initiative on “enablers” of tax evasion and aggressive tax planning, called “SAFE”, is on hold as it cannot be launched as long as the future of the Unshell project remains uncertain.

  • The examination of the Debt-Equity Bias Reduction Allowance directive proposal, called “DEBRA” is also still on hold, and it is expected that this situation will remain unchanged in the coming months.

  • Finally, the 3 most recent directive proposals - (1) called “BEFIT”, (2) the Head Office Tax System for SMEs and (3) on transfer pricing - are only at the very early stage of the legislative procedure. However, the EU Council has been working actively on the
    transfer pricing proposal so far, illustrating its willingness to have this project move forward quickly.

  • We provide hereafter an overview of the state of play of the most recent European direct tax initiatives of the European Commission.