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The Polish presidency of the EU Council brought significant progress in the area of taxation in the first half of 2025. At the ECOFIN meeting on 20 June, the finance ministers approved a report summarizing six months of intensive legislative work. The presidency achieved several important goals - finalizing the long-awaited VAT reforms, strengthening administrative cooperation, and proposing initiatives to simplify tax regulations.
One of the most important challenges was the proposal for a directive on transfer pricing, which the European Commission presented in September 2023. The project was to unify the basic principles and definitions of transfer pricing across the EU based on OECD guidelines, simplifying settlements between related entities from different countries. However, during the Polish presidency, it turned out that there was a lack of unanimous support for a binding regulation. Many member states feared interference in national tax systems and preferred non-legislative solutions.
Instead of pushing for a directive, Poland has proposed establishing a transfer pricing cooperation platform. The platform would enable experts from EU countries to develop non-binding solutions and guidelines in the spirit of OECD principles, reducing complexity and compliance costs without creating separate EU law. The concept has met with interest as a pragmatic alternative to achieving greater coherence in the EU while preserving the tax autonomy of member states.
During the Polish presidency, the BEFIT project (Business in Europe: Framework for Income Taxation) was discussed. This unified corporate income tax system for large capital groups is intended to replace earlier ideas that had been in an impasse for years. Given the broad scope and complexity of BEFIT, the Polish presidency did not try to speed up the work by force, focusing on more advanced tax topics.
The Council agreed on a gradual approach to BEFIT. Several member states suggested focusing the discussion first on selected elements of the new tax formula. Detailed technical analyses will continue, while a broader political debate has been postponed to subsequent presidencies. Although there are no immediate solutions, keeping BEFIT on the agenda underlines the EU's long-term goal: simplifying and harmonising corporate tax rules with a view to the single market.
In the area of indirect taxes, the Polish presidency achieved significant successes. The most important was the formal adoption of the entire "VAT in the Digital Age" (ViDA) package in March 2025. The reforms adapt the VAT system to the digital economy by introducing mandatory e-invoices and electronic reporting, facilitating a single VAT registration for companies operating cross-border and adapting the regulations to e-commerce and online platforms. The aim of the changes is to tighten the system while simplifying settlements for honest taxpayers.
Equally important was the adoption of regulations introducing an electronic VAT exemption certificate, which will replace certificates for diplomatic deliveries, international organizations or the military. The new regulations introduce a uniform electronic form, significantly reducing bureaucracy when importing goods covered by the exemption. Although the e-certificate will not come into force until several years (a transitional period until 2032 has been provided for), its establishment is an important step towards the digitalization of tax administration.
The third success was the agreement on a common position on improving VAT collection on small import shipments (IOSS). The amendment encourages wider use of the Import One Stop Shop procedure for collecting VAT on low-value shipments. The responsibility for paying import VAT will lie directly with the foreign seller or platform. If the seller does not use IOSS, he will have to register for VAT in each country of delivery - this is a strong incentive to use the import one-stop shop.
The Polish presidency also continued work on the revision of the 2003 Energy Directive, adjusting minimum excise duty rates to the EU's climate goals (Fit for 55). Proposals include higher minimum rates for fossil fuels, taxation of new energy carriers, and limiting reliefs that are incompatible with the green transformation. Negotiations have proven difficult due to the countries' divergent positions on the pace and scope of energy tax increases.
At the end of the presidency, the Polish side prepared a progress report, summarizing the agreements and issues requiring further talks. The report adopted by the ECOFIN ministers sets the direction for the Danish presidency to possibly finalize the compromise. The Polish presidency accelerated the discussion on the energy tax, although the final decision will take place in the future.
A milestone of the presidency was the strengthening of information exchange between tax administrations. In March 2025, the Council adopted the DAC9 directive, the ninth amendment to the rules on administrative cooperation in the field of taxation. DAC9 introduces mechanisms for the exchange of data on global minimum taxation (Pillar 2 of the OECD).
The new regulations will oblige large international capital groups to submit standardized reports on the effective amount of tax paid and other parameters needed to calculate the top-up tax. All tax administrations in the EU will be able to automatically exchange this information, which is crucial for the smooth implementation of the global minimum CIT tax. DAC9 unifies the reporting format (GloBE Information Return) and simplifies the obligations for companies, ensuring the submission of one set of information for the entire EU instead of many different national reports.
The Polish presidency also acted globally, coordinating the EU's position on tax matters. Work was monitored on an ongoing basis in the OECD/G20 BEPS Forum (Base Erosion Profit Shifting), especially on the implementation of the tax reform based on two pillars. After the adoption of Pillar 2 of BEPS in the EU, discussions focused on removing obstacles to the joint implementation of minimum taxation. As for Pillar 1 (taxation of the largest digital corporations), global negotiations are still dragging on, but the ECOFIN Council confirmed its support for developing an international consensus within the OECD.
A new element of the international landscape is the UN initiative on multilateral tax cooperation. In November 2024, the UN General Assembly adopted a resolution initiating work on the UN Framework Convention on Tax Cooperation. During the Polish presidency, the first negotiation meeting took place in New York, where it was agreed to divide the work into three areas. Poland took care to develop a common EU approach in these talks, so that the potential global convention would be complementary to the OECD arrangements.
One of the priorities of the Polish Ministry of Finance was to combat the excessive complexity of tax regulations. On 11 March 2025, the ECOFIN Council unanimously approved conclusions on a program to streamline and simplify tax regulations in the EU. The proposal formulates the principles that the EU should follow when preparing new regulations - emphasis on avoiding duplication of obligations, assessing the effects on the competitiveness of companies and eliminating outdated regulations.
The Polish presidency in the area of taxation proved to be extremely fruitful. It managed to finalize several long-negotiated projects (digital VAT reform and DAC9), give impetus to more difficult dossiers by developing new directions, and also take care of cross-cutting issues - simplification of the system and international cooperation.
For businesses, this means many upcoming legal changes, especially in VAT and settlements of international corporations. It is clear that the Union is moving towards greater harmonization and tax transparency, trying not to add unnecessary burdens. The Polish emphasis on competitiveness and simplicity of regulations was well received - many of the described activities will be continued by subsequent presidencies, maintaining the high rank of tax issues on the EU agenda.
