Changes between two versions
What changed between the draft committee report and the plenary report
From · draft committee report· 24 Mar 2025
on the role of simple tax rules and tax fragmentation in European competitiveness
To · plenary report· 24 Jul 2025
on the role of simple tax rules and tax fragmentation in European competitiveness
AI:What changed, in short
The report expands significantly, adding many new paragraphs on tax simplification, VAT reform, and international taxation.1234 It introduces new calls for an EU Tax Data Hub, electronic invoicing, and measures to address US tariff threats.510 It adds emphasis on R&D tax incentives, cross-border workers, and individual mobility, with new paragraphs on these topics.13141516 It updates references to the Draghi and Letta reports and adds new recitals on compliance costs and tax gaps.12311 The other changes are formal: updated Treaty citations and percentage formatting.1718
16 changes of substance · 2 formal · 0 of wording only
Written by AI from the two texts only · read the changes before relying on it · 4 Sept 2026 · Report a problem
+79 added · −23 removed · 28 changed paragraphs, packaging included.
Part 4 of 4: EXPLANATORY STATEMENT
EXPLANATORY STATEMENT
Your Rapporteur takes the view that in the current economic landscape, we must strive for simplification and reduce regulatory and administrative burden.
The European Union’s tax landscape is at a critical juncture, requiring a balance between fostering economic growth, enhancing competitiveness, and ensuring tax fairness. The evolving economic environment, marked by digitalisation and globalisation, requires coordinated tax policies to address cross-border challenges while reducing administrative burdens for businesses, particularly small and medium-sized enterprises (SMEs).
Change 17
Changed:The principles enshrined in Article 4 of the Treaty on European UnionUnion, in particular in Article 4, and in the TreatiesTreaty on the Functioning of the European Union underscore the importance of the internal market, the free movement of goods, services, capital, and people. A predictable tax framework is fundamental to supporting the internal market and ensuring that businesses can operate efficiently across borders without undue complexity. While the EU has made progress in tackling tax evasion and avoidance, further measures are needed to reduce bureaucratic hurdles and create a more business-friendly environment, as highlighted in the Draghi report on “The Future of European Competitiveness”.
Change 18
Changed:Tax simplification and digitalisation are key to reducing compliance costs and improving efficiency. The Commission’s commitment to cutting reporting requirements by 25 %25% (and at least 35 %35% for SMEs) is a step in the right direction. Ex-ante impact assessments for new tax-related proposals and competitiveness checks on existing measures will help align tax policies with broader economic goals.
Digitalising tax administration holds great potential for reducing administrative burdens. Leveraging artificial intelligence (AI) and digital tools can streamline compliance processes, making it easier for companies, especially SMEs, to navigate complex tax regulations.
Strengthened cooperation between Member States is crucial for tackling tax evasion and aggressive tax planning. Improved information exchange, coordinated audits, and enhanced enforcement mechanisms can strengthen the fight against tax abuse.
In conclusion, the EU’s tax agenda must prioritise simplification, digitalisation, and cooperation to create a fairer and more competitive tax environment. By reducing fragmentation and complexity, enhancing digital tools, and embracing coordinated policies, the EU can lay the groundwork for sustainable growth and prosperity in the years to come.