The European Commission has presented its communication on own resources and directives on a minimum corporate tax and fighting shell entities.
Reaction came from BusinessEurope Director General Markus J. Beyrer who said: “It is important that the EU has a stable funding source through its own resources. The best way to ensure we are able to effectively repay the NextGenerationEU funding is by avoiding placing additional burden on business. Following the global agreement at the OECD on corporate tax reform, we welcome the EU’s decision not to propose a digital levy, but we remain seriously concerned about initiatives such as a possible Single Market Tax.”
On the proposal for allocating a share of the corporate tax revenue raised under the OECD Pillar 1 and using ETS revenue as an own resource, Beyrer commented: “If Member States all agree to reallocate a proportion of corporate tax revenue accruing to them following the OECD tax reform from their own treasuries to the EU as an own resource, this is something we are open to, provided that such a transfer does not increase the burden on business. Shifting ETS revenues from being mainly a national resource to an EU resource does not change the core challenge: making sure that ETS revenues are re-invested, in a transparent way, in the sectors covered by the system.”
Regarding the Commission’s proposed implementation of the OECD minimum corporate tax rate, Beyrer said: “The OECD international corporate tax agreement will be a significant transformation of the tax rules we know today. Once implemented globally, the new rules can bring stability and coherence to the international tax system. But we need to ensure EU businesses are not put at a competitive disadvantage. It’s therefore essential that the minimum corporate tax becomes effective in the EU only if and when our major trading partners have implemented the same rules.”
On the Commission’s proposal to address tax abuse by so-called ‘shell entities’, Beyrer said: “We support the European Commission’s efforts to strengthen the fight against tax fraud, evasion and aggressive avoidance practices. We particularly welcome efforts to end the illegal, fraudulent and abusive use of so-called ‘shell entities’ structures, provided this recognises, as the Commission has noted, that such structures may also be used for legitimate business purposes.”