Failed to execute goal org.apache.maven.plugins:maven-compiler-plugin:2.5.1:compile (default-compile) on project XYZ: Fatal error compiling: tools.jar not found: C:\java\jdk1.8.0_40..\lib\tools.jar 

To Fix this Issue Right click on project -> Run As or Debug As -> Run Configurations

Runtime JRE: should be pointing to jre , it should actually point to jdk .

Click on Installed JREs .. add an jdk and update Runtime JRE to jdk.

This should fix the issue