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With the Foreign Subsidies Regulation (FSR) under review, now is the moment to ensure it delivers on its objectives without creating unnecessary complexity. The FSR plays an important role in addressing distortive foreign subsidies. However, its broad scope and resource-intensive procedures risk undermining its effectiveness. 

The current framework creates significant burdens for investors and contracting authorities managing public procurement processes. Changes to the Implementing Regulation alone would only provide limited value. Simplification will require targeted amendments to the primary legislation. 

Read more about proposed amendments that would help refocus the FSR on high-risk cases and support the EU’s competitiveness goals.

The Tax Omnibus presents a critical opportunity to modernise the EU's tax rules in light of the evolving international framework, notably the implementation of Pillar 2. Many existing directives were designed in response to earlier Base Erosion and Profit Shifting (BEPS) measures and now impose duplicative, fragmented and resource-intensive requirements on businesses. These burdens undermine tax certainty, increase compliance costs and weaken the EU’s attractiveness as an investment destination.

The EU proposed the Foreign Subsidies Regulation (FSR) in 2021 to address foreign subsidies distorting the Single Market. Operating as a screening instrument behind merger control, it requires companies to notify the European Commission of foreign financial contributions (FFCs) they may receive when participating in public procurement or mergers and acquisitions activity. Preventing FFCs from distorting the Single Market is an important goal – and one that must be achieved without creating its own disruptions.