Insurance Europe sets out proposals to simplify EU direct taxation rules

Insurance Europe has submitted a response to the European Commission's call for evidence on the Taxation Omnibus initiative, welcoming the Commission's efforts to simplify EU direct taxation rules and reduce unnecessary administrative burdens.

In its response, Insurance Europe stresses that greater legal certainty and proportionality are essential to ensure that the EU tax framework remains efficient, competitive and proportionate:

• Parent Subsidiary Directive (PSD): Insurance Europe highlights persistent divergences in national interpretation that undermine the Directive's objective of eliminating double taxation. Clarifications are needed on the treatment of profit-related municipal taxes, the application of the anti-abuse rule, the definition of beneficial ownership, participations held through partnerships, the effective elimination of withholding taxes, and procedural aspects such as residence certificates and digitalised processes.
• FASTER Directive: Insurance Europe calls for equal treatment of occupational pension institutions supervised under Solvency II that meet the substantive conditions of the IORP framework, to ensure consistent access to fast-track withholding tax relief and greater legal certainty.
• ATAD and interaction with Pillar Two: Insurance Europe underlines the need to avoid duplicative compliance by better aligning Controlled Foreign Company rules, hybrid mismatch provisions and interest limitation rules with the global minimum tax framework.
• Merger Directive: Greater clarity is needed on the relevant effective date for tax purposes in cross-border mergers, as well as on the allocation of shared assets in partial divisions.
• DAC 6: The response questions whether DAC 6 remains proportionate in light of Pillar Two, highlighting significant administrative burdens and overlap, and proposes a repeal or substantial streamlining.
• Minimum Taxation Directive: Insurance Europe advocates targeted simplifications to improve administrability for regulated groups, including greater reliance on financial accounting data, exclusions for immaterial entities and further technical refinements to reflect practical implementation challenges.

READ THE FULL RESPONSE HERE