Commission plans EU corporate tax overhaul – POLITICO

A planned corporate tax reform in the EU would replace national corporate tax rules, EU Economics Commissioner Paolo Gentiloni said on Monday.

The Business in Europe Framework for Income Taxation, or BEFIT, would « replace national corporate tax systems for affected businesses, reducing compliance costs and barriers to cross-border investment », it said. he said at a European tax event on Monday.

It would build on a global agreement on a two-legged corporate tax that was agreed between more than 130 countries in 2021, and consists of the reallocation of taxable profits (known as the first pillar) and a minimum corporate tax base of 15% (known as Pillar Two), the latter of which the EU has struggled to ratify due to subsequent vetoes by first Poland and now Hungary.

But it “would go further,” Gentiloni said. It would have « the main features of a simplified common tax base and distribution of taxable profits between member states », thus diminishing tax policies within the bloc by which countries seek to attract companies by attracting them with favorable tax regimes.

The reform is currently scheduled for the third quarter of 2023, according to the Commission’s own work programme. A public consultation runs until January 26.

Tax initiatives are always tricky because they require the consent of all 27 EU countries.