Key Priorities of the European Commission in Taxation

EU Commissioner W. Hoekstra delivered the keynote speech at the 2025 EU Tax Symposium which provides a good overview on the key taxation priorities of the European Commission. These are structured around three core themes: competitiveness and the green transition, efficient and effective taxation, and international fairness and transparency.

COMPETITIVENESS AND THE GREEN TRANSITION

Commissioner Hoekstra emphasized the EU's commitment to fostering a competitive and environmentally sustainable European economy. Recent flagship proposals, such as the Clean Industrial Deal and the Omnibus Simplification package, underscore this commitment. These initiatives highlight two key priorities: accelerating decarbonization and integrating businesses into the transition process.

To support the green transition, the Commission is urging Member States to swiftly conclude negotiations on the Energy Taxation Directive. This reform is crucial in promoting electrification and reducing reliance on fossil fuels, with all sectors, including aviation and maritime, expected to contribute their fair share.

In addition, targeted tax measures will alleviate high energy costs for energy-intensive industries. These include reducing electricity taxes, eliminating unnecessary fees, and introducing tax incentives for clean investments. Businesses in strategic sectors of the clean transition will benefit from tax credits and shorter depreciation periods to encourage investment in sustainable technologies.

Furthermore, the Carbon Border Adjustment Mechanism (CBAM) plays a pivotal role in balancing decarbonization efforts with global competitiveness. The Commission has proposed simplifying CBAM reporting requirements while maintaining its effectiveness in capturing emissions, laying the groundwork for future sector expansions.

EFFICIENT AND EFFECTIVE TAXATION

Ensuring efficient tax collection is fundamental to fostering economic growth and maintaining public trust. Many EU Member States face fiscal constraints, making it imperative to maximize existing tax revenues rather than imposing new taxes. Addressing the tax gap, particularly in VAT collection, is a major priority.

MODERNIZING VAT COLLECTION

In 2022 alone, the EU lost approximately €89 billion due to VAT fraud and inefficiencies. The recently adopted VAT in the Digital Age (ViDA) initiative represents a significant step forward in modernizing VAT collection, simplifying compliance, and reducing administrative burdens on businesses.

STRENGTHENING TAX ADMINISTRATION AND COOPERATION

To further enhance tax efficiency, the Commission advocates for improved cooperation between Member States and stronger engagement with the European Public Prosecutor. Strengthening cross-border information sharing will help combat tax evasion and ensure that liabilities are properly enforced across jurisdictions.

FAIRNESS AND TRANSPARENCY ON THE INTERNATIONAL STAGE

On the international front, the Commission remains committed to cooperation with OECD and G20 partners to advance fair taxation. The Global Tax Deal aims to prevent profit shifting by multinational corporations and establish a minimum level of tax competition to avoid a race to the bottom. Despite challenges posed by recent policy shifts in the United States, the EU remains steadfast in implementing these global tax reforms.

TAXING THE DIGITAL ECONOMY

Digital transformation presents additional taxation challenges, as current rules were designed for traditional businesses. The Commission supports continued OECD efforts to update tax frameworks to reflect the realities of the digital economy. Ensuring that all businesses, including emerging digital enterprises, contribute fairly remains a key priority.