Cyprus is playing a central role in shaping Europe’s future tax landscape, with MEP Michalis Hadjipantela being appointed rapporteur of a key European Parliament report aimed at simplifying tax rules and boosting competitiveness.

“I feel proud that my political group and the European Parliament have chosen me to be the rapporteur of this important report, which will affect the European tax system in the coming years,” Hadjipantela told InBusinessNews.

“It is ensured that where we can, we will safeguard the interests of Cyprus,” he added.

“We have proven that when we have the will, when we have passion and when we work hard, we can be rapporteurs on important chapters and for important files, such as this one,” he continued.

The report—titled ‘The role of simple tax rules and tax fragmentation in European competitiveness’—is currently under discussion in Brussels, with political groups preparing amendments ahead of a final vote expected before the end of July.

The initiative, launched by the European Parliament’s Subcommittee on Taxation (FISC), targets the complex and fragmented tax environment in the EU.

Hadjipantela’s draft, shaped after consultations with stakeholders such as ICPAC, was met with broadly positive feedback during its initial review with shadow rapporteurs.

Hadjipantela’s approach, outlined in the explanatory memorandum, calls for simpler tax rules, better digital tools, and closer cooperation among Member States to support cross-border business, especially for SMEs.

“The evolving economic environment, which is characterised by digitalisation and globalisation, requires coordinated tax policies to address cross-border challenges while reducing the administrative burden for businesses,” he stated.

He also welcomed the European Commission’s commitment to reduce reporting obligations by 25 per cent, and by 35 per cent for SMEs, calling it a positive step.

A central argument in his report is that predictable and streamlined tax systems are essential for a functioning single market, supporting the free movement of goods, services, capital and people.

While recognising efforts made in fighting tax evasion and avoidance, Hadjipantela argues for stronger cooperation between Member States, including coordinated audits and data-sharing mechanisms.

He emphasised the need to respect subsidiarity and proportionality, allowing national governments to tailor tax systems to local conditions while adhering to common EU standards.

Small and medium-sized enterprises, described as the “engines of growth and job creation”, are a focal point.

Fragmented tax systems, Hadjipantela warns, continue to burden these businesses, stifling innovation and expansion.

He proposes competitiveness checks on both new and existing tax measures to better align tax policy with broader economic goals and sees digitalisation—particularly AI tools—as a way to ease compliance costs.

The goal of the report is to offer clear proposals that will help the European Commission craft a simpler and more business-friendly tax framework across the EU in the years ahead.