What changed

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

Follow up to the European Parliament non-legislative resolution on drones and new systems of warfare – the EU’s need to adapt to be fit for today’s security challenges

on the feasibility of a 28th tax regime and its potential to support EU competitiveness

Rapporteur: Reinis POZŅAKS (ECR / LV)

(2025/2211(INI))

References: 2025/2088(INI) / A10-0270/2025 / P10_TA(2026)0020

The European Parliament,

Date of adoption of the resolution: 22 January 2026

– having regard to Articles 4(2)(a), 5, 6(g), 50, 113, 114(1), 115, 116 and 225 of the Treaty on the Functioning of the European Union,

Competent Parliamentary Committee: Committee on Security and Defence (SEDE)

– having regard to the Commission proposal of 18 March 2026 for a Regulation of the European Parliament and of the Council on the 28th regime corporate legal framework – ‘EU Inc.’ (COM(2026)0321),

Brief analysis/ assessment of the resolution and requests made in it:

– having regard to its resolution of 20 January 2026 with recommendations to the Commission on the 28th Regime: a new legal framework for innovative companies1,

The resolution calls for a unified EU’s approach to the development, deployment and governance of drone and counter-drone capabilities, recognising their growing importance for European security, defence, resilience and industrial competitiveness in light of an evolving threat environment. It supports the systematic integration of drones into existing European infrastructure monitoring and civil protection systems, while promoting dual-use funding models that strengthen defence readiness and civilian applications. Enhanced cooperation between the defence, space, transport and civil sectors is emphasised to accelerate interoperable, multi-domain unmanned systems. The resolution underlines the need to protect critical infrastructure against malicious drone activities and expresses concern over Russia’s use of drones, including violations of EU airspace. A focus is also placed on industrial capacity, notably on supporting SMEs and start-ups through simplified access to financing, reduced administrative burdens and accelerated deployment pathways. The resolution encourages scalable funding models, joint ventures with major defence primes, and closer cooperation with Ukrainian industry to reinforce Europe’s technological and defence capabilities. Addressing strategic dependencies, the resolution stresses the urgency of reducing reliance on third countries for critical components and rare earth materials. It further calls for harmonised transfer and export control rules, EU-NATO interoperability standards, and the integration of drones into military mobility frameworks. Finally, the resolution highlights the importance of testing infrastructures, public awareness, skills development and education.

– having regard to the Commission communication of 21 October 2025 entitled ‘Commission work programme 2026 – Europe’s Independence Moment’ (COM(2025)0870),

Response to the requests and overview of the action taken, or intended to be taken, by the Commission:

– having regard to the Commission communication of 19 March 2025 entitled ‘Savings and Investments Union – A Strategy to Foster Citizens’ Wealth and Economic Competitiveness in the EU’ (COM(2025)0124),

As regards paragraphs 18 and 43, the Commission highlights the new Action Plan on Drone and Counter-Drone Security, adopted on 11 February 2026, that sets out a general strategic outlook on planned actions and also includes recommendations of the Parliament, especially concerning building synergies between civilian and defence research and development (R&D) investment for drones and counter-drone systems. Furthermore, the Commission adopted the Military Mobility Package in November 2025, that proposes to enhance the protection of strategic dual-use transport infrastructure, including measures against cyber and hybrid threats. Additionally, the Military Mobility Package suggests the establishment of regulatory testing environments (‘regulatory sandboxes’) to accelerate the development of technologies such as dual-use air transport solutions and Unmanned Aerial Systems (UAS) within the Union, through collaboration between civil and military authorities. This initiative seeks to bridge existing regulatory gaps, foster interoperability, and will serve as the political framework for future financial support in this area.

– having regard to the Commission communication of 29 January 2025 entitled ‘A Competitiveness Compass for the EU’(COM(2025)0030),

Concerning paragraph 37, and in line with the Commission Communication of 11 February 2026 on the Action Plan on Drone and Counter-Drone Security, the Commission’s Joint Research Centre’s Counter-UAS Living Lab will be upgraded into an EU Counter-Drone Centre of Excellence. This upgrade will strengthen the Union’s capacity to systematically test and assess counter-UAS solutions in realistic operational environments. The Centre of Excellence will generate evidence-based knowledge on requirements, performance and operational use of counter-UAS systems, in close cooperation with Member States and EU agencies. The results of these activities will directly feed into the regular update of the JRC counter-UAS handbooks, ensuring that they remain practical, harmonised and aligned with technological developments and evolving threat scenarios.

– having regard to the Commission communication of 28 May 2025 entitled ‘The EU Startup and Scaleup Strategy – Choose Europe to start and scale’ (COM(2025)0270),

On paragraph 38, the Commission takes note of the Parliament’s call to ensure protection of critical EU infrastructure and entities against possible drone attacks. The new Action Plan on Drone Security and Counter-Drone Security is the civilian contribution to the ongoing defence initiatives and aims to further enhance EU resilience and preparedness against UAS, to protect critical infrastructures, external borders and public spaces as well as the maritime domain. The Action plan considers all kind of threats, from unintentional incidents (private citizens flying drones over an airport), to organised crimes, terrorist and hybrid attacks, as well as the role of drones in the battlefield. Civil security research and innovation actions also contribute to developing detection, prevention and response capabilities against drone-related threats to critical infrastructure, reinforcing the EU’s resilience and reducing strategic dependencies in key enabling technologies. The Action plan sets out Commission initiatives concerning the protection of critical infrastructure from drone threats, the detection of threats against undersea cables, the support for Member States to test and take advantage of 5G networks to enhance the detection capacities of drones flying over critical infrastructure and the launch of a joint deployment initiative of counter-drone systems over critical infrastructure together with Member States. With the Critical Entities Resilience (CER) Directive, the EU has also put in place a horizontal framework to enhance the physical resilience of critical infrastructure, and of critical entities operating such infrastructure, that addresses both man-made and natural threats to the physical security of critical infrastructure. To support Member States and critical entities, the Commission will issue guidelines for resilience enhancing measures, including targeted guidance for critical entities on countering threats posed by drones. The Commission will also propose a plan to stress test the resilience of critical infrastructures against all drone-related threats, based on the model of the previously conducted stress testing of critical infrastructure in the energy sector and for submarine cables.

– having regard to the report of 9 September 2024 by Mario Draghi entitled ‘The future of European competitiveness’ (Draghi report),

Concerning paragraphs 52, 53 and 54, the Commission and the High Representative share the Parliament’s concerns regarding extensive use by Russia of drones or related equipment delivered by third countries or manufactured with the support of Russia’s partners. The EU has established a comprehensive framework to impose sanctions on logistical infrastructures in Russia, on vessels used to transport drone components, on third country companies directly supporting Russia military and industrial complex, and to tighten export control towards entities contributing to Russia manufacturing capabilities. In January 2026, the EU extended the list of goods and technologies barred for export to Iran in view of their probable contribution to Russia military capacity and listed additional individuals and entities involved in manufacturing or transferring drone and military components to the benefit of Russia.

– having regard to the report of 17 April 2024 by Enrico Letta entitled ‘Much more than a market’,

Regarding to paragraph 72, the Commission recognises the importance of bolstering support for EU drone manufacturing SMEs and is aware of the structural and ecosystem-related challenges they encounter. The Commission has put in place dedicated instruments which provide guidance to defence SMEs and small mid-caps on the opportunities offered in the defence sector, for instance in the framework of the European Defence Fund (EDF), the European Defence Innovation Scheme (EUDIS), or the European Defence Industry Programme (EDIP). In addition, the European Network of Defence-related Regions offers a platform for defence-related regional organisations and industry clusters. Recognising the specific challenges of the drone ecosystem, the Commission is also promoting targeted activities such as a dedicated Industry Roundtable on drone and counter-drone solutions and the creation of a drones and counter-drones Tech Alliance to support the emergence of a cohesive European drone manufacturing ecosystem. The Commission is also working on establishing a Drone Alliance with Ukraine, to bring Ukraine’s experience and innovative approaches to the European industrial drone manufacturing ecosystem and to foster collaboration and industrial joint ventures, both within EU27 and between Member States and Ukraine, by bringing together system integrators, start-ups/scale-ups and a community of innovators. Furthermore, the European Investment Bank (EIB) Group has established a one-stop shop to facilitate access to debt and equity financing for the defence industry – particularly for projects supported by the Commission, including under InvestEU. In addition, the EUDIS Matchmaking platform, launched by the Commission in 2025, connects SMEs and small mid-caps seeking financing with European investors.

– having regard to the Commission proposal of 12 September 2023 for a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT) (COM(2023)0532),

On paragraphs 73 and 74, the Commission on 25 March 2026 hasadopted ‘AGILE’ the new instrument to support rapid defence innovation. The objective is to enable the deployment of cost-effective, innovative defence products and technologies for the needs of Member States’ armed forces. Moreover, through the BraveTechEU initiative, the Commission will work with the European Defence Agency (EDA) and Ukraine to accelerate the development of counter-drone technologies, ensuring solutions are tailored to operational needs and validated through testing and evaluation campaigns. Furthermore, the Commission will also provide targeted assistance to strengthen Ukrainian SMEs’ competitiveness, innovation, and access to European markets through the Ukraine Support Instrument (USI) of the EDIP. Also, the EUDIS is interlinked with the EDA’s Hub for European Defence Innovation (HEDI), which coordinates Member States’ efforts to accelerate the adoption of new technologies by identifying solutions to pressing military challenges – in 2025 HEDI conducted its first Operational Experimentation campaign and launched an initiative on Unmanned Aerial Systems (UAS). Under Horizon Europe, the EU has invested and will continue to invest in research and development of drone technologies and counter-drone solutions to protect public spaces, border management and critical infrastructures. These projects are civilian in purpose, but many results have a dual-use potential. Furthermore, the European Innovation Council (EIC) has built a strong portfolio in drone technologies, investing around EUR 120 million in 18 companies. Following the adoption of the Regulation incentivising defence-related investments in the EU budget (so called Mini-Omnibus) , the EIC will be able to support companies developing dual-use technologies through its Accelerator scheme, including those in the area of drone and counter-drone technologies with further scale up support available under EIC STEP Scale Up Scheme (for which defence companies will also be eligible).

– having regard to its position of 13 November 2025 on the proposal for a Council directive on Business in Europe: Framework for Income Taxation (BEFIT)2,

Concerning paragraphs 78 and 79, the Commission has taken concrete steps to accelerate the scaling of SMEs and deepen industrial collaboration. Through the combined leverage of the EUDIS, the EDF, and the EDIP, the Commission is deploying targeted financial and regulatory instruments. The Commission has established a multi-layered funding architecture to ensure that drone and counter-drone SMEs can scale effectively within the Union. Under the EUDIS, the Commission has introduced specific SME calls for research and development, allowing consortia composed of SMEs to drive innovation in areas like autonomous flight or sensor miniaturization without competing against established industrial Primes. To address the critical need for private investment, EUDIS includes the Defence Equity Facility, that injects equity into venture capital funds that specifically target innovative defence start-ups. This ensures that drone scale-ups have a reliable pathway to market maturity and the capital required to build out industrial capacity. These efforts are further bolstered by the BraveTech EU initiative and the EDIP’s Fund to Accelerate defence Supply chains Transformation (FAST), which provide support necessary for SMEs and small mid-caps to move from prototype to mass production. Also, the EIC has demonstrated strong market traction through its investment model, achieving a leverage effect of approximately 1 to 3 through co-investments with a broad network of European investors. This positions the EIC as a key Union instrument for scaling up deep-tech SMEs and translating critical defence and dual-use technologies into industrial capacity. Through blended finance and direct equity, the EIC can support successive growth phases, from validation and testing to production scale-up and create the conditions for closer industrial cooperation between innovative SMEs and established European defence actors. Ukrainian entities are eligible to participate in the relevant EIC defence calls, thereby supporting deeper industrial cooperation.

– having regard to the Commission proposal of 12 September 2023 for a Council Directive establishing a Head Office Tax system for micro, small and medium sized enterprises, and amending Directive 2011/16/EU (COM(2023)0528),

To foster deeper cooperation between major European defence primes and agile drone innovators, the EDF utilises an incentive system (including a bonus to the funding rate and specific award criteria) that rewards consortia that include smaller players. These incentives make it advantageous for primes to include SME partners for complex drone and counter-drone projects.

– having regard to its position of 10 April 2024 on the proposal for a Council directive establishing a Head Office Tax system for micro, small and medium sized enterprises, and amending Directive 2011/16/EU3,

Finally, recognising the vital importance of real-world operational feedback, the Commission has integrated Ukraine into the EU’s defence industrial ecosystem. The BraveTechEU connects the EU’s industrial muscle with Ukraine’s BRAVE1 platform, facilitating the rapid iteration of drone technologies based on current battlefield requirements. This cooperation is physically anchored by the EU Defence Innovation Office (EUDIO) in Kyiv, which acts as a primary hub for matchmaking and joint ventures between EU primes and Ukrainian innovators in defence and dual-use sectors. The Ukraine Support Instrument under EDIP (BraveUSI) provides a dedicated framework to procure from and co-produce with Ukrainian companies. The Mini-Omnibus has formally paved the way for Ukraine’s association with the EDF, allowing their industry to participate in EU-funded consortia and ensuring a unified technological front for European defence.

– having regard to the Commission proposal of 25 October 2016 for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB) (COM(2016)0683),

Regarding paragraph 92, the Commission refers to the ‘Defence Readiness Omnibus’ simplification package presented in June 2025 that aims - among other objectives - at introducing simpler, leaner and faster conditions for the transfer of defence-related products within the EU. The ‘Defence Readiness Omnibus’ is currently under interinstitutional negotiation. In addition, the Transfers Directive 2009/43/EC is currently being evaluated. In this context, the Commission notes that the Transfers Directive 2009/43/EC and Dual Use Regulation (EU) 2021/821 are distinct in scope, in terms of products they control and geographically (transfers versus exports): while the Transfers Directive 2009/43/EC deals with intra-EU transfers of defence-related products, which are controlled within the Union and need a transfer licence, the Dual Use Regulation (EU) 2021/821 only imposes licence requirements for a small subset of dual use items within the Union.

– having regard to the Commission proposal of 25 October 2016 for a Council Directive on a Common Corporate Tax Base (COM(2016)0685),

On paragraph 96, the Commission takes note of the Parliament’s call to address the EU’s dependency on Chinese rare earth metals that are essential for the defence industry. In 2025, the Commission has selected strategic extraction, processing and recycling projects for rare earths under the Critical Raw Materials (CRM) Act and launched the RESourceEU Action Plan to accelerate the implementation of the CRM Act. The Commission will set up a multi-pillars CRM financing hub to de-risk CRMs projects through a range of EU instruments, propose adjustments to the EU regulatory framework on permitting to improve the framework conditions helping projects become operational more quickly, and propose restrictions on the export of scraps and waste of permanent magnets from the EU by Q2 2026 to secure the necessary feedstock for domestic industry. Additionally, the Commission will establish a CRM Centre by Q2 2026 to support the EU’s long-term competitiveness and the resilience of the Single Market, by facilitating strategic stockpiling, joint purchasing operations, and demand–supply matchmaking. The Commission will also launch calls under Horizon Europe on innovative technologies for exploration, processing, recycling and substitution of critical and strategic raw materials.

– having regard to the Commission proposal of 11 May 2022 for a Council Directive on laying down rules on a debt-equity bias reduction allowance and on limiting the deductibility of interest for corporate income tax purposes (COM(2022)0216),

Concerning the defence sector specifically, the Commission is addressing the EU's critical dependencies on Chinese rare earth metals and other strategic materials essential for the drone and counter-drone sectors by embedding supply chain resilience directly into the EDF. The Commission has launched specific "spin-in" actions, which facilitate the transition of advanced materials from civilian research into high-performance defence applications. To foster long-term resilience, the Commission also provides a dedicated pathway for radical technological shifts through the Non-Thematic Disruptive Research track. Under its Industrial Reinforcement pillar, EDIP also offers grants to modernise production capacities for raw materials, while the FAST Instrument provides funding to accelerate the transformation of SMEs within the defence supply chain. Furthermore, the Security Action for Europe (SAFE) instrument mobilises up to EUR150 billion in loans to support Member States in joint public investments - such as drone fleets and missile defence - creating the aggregated demand necessary to justify domestic material refining. These efforts are also structurally integrated with the USI that fosters joint ventures that utilise battlefield-tested, non-Chinese component solutions. By strictly enforcing a 35% cap on components from non-associated third countries, EDIP ensures that the innovations developed under the EDF transition into a sovereign, "battle-proven" European industrial base.

– having regard to the Commission recommendation of 18 March 2026 on the definition of innovative enterprises, innovative startups and innovative scaleups,

Regarding paragraph 97, the Commission will ensure compliance with eligibility criteria for major sub-components in EU-funded drone platforms, in line with regulations agreed and adopted by the co-legislators. The Commission’s stance is and will continue to be guided by a principle requiring a careful balance between providing the flexibility needed to meet Member States’ immediate needs and pursuing the long-term goals of greater sovereignty and autonomy.

– having regard to Flash Eurobarometer 559 from February to April 2025 on Startups, scaleups and entrepreneurship,

On paragraph 106, the recently adopted Action Plan on Drone and Counter-Drone Security already covers a considerable number of recommendations of the European Parliament, especially when it comes to building synergies between civilian and defence R&D investment for both, drones and counter-drone systems. In this context, the Commission also underlines the contribution of civil security research and innovation under Horizon Europe – Cluster 3 “Civil Security for Society” – which supports the development of technologies enhancing resilience, protection of critical infrastructure and preparedness against emerging threats, including those linked to UAS. Such investments contribute to strengthening the Union’s technological base and strategic autonomy in security-related domains. Additionally, the Action Plan sets out a coordinated risk assessment – launched together by the Commission with Member States – on drone and counter-drone systems to ensure the security of related Information and Communications Technology (ICT) supply chains (in line with the recently adopted Cybersecurity Act review regulation), to potentially adopt a Drone and Counter-Drone Security Toolbox.

– having regard to the European Council conclusions of 19 March 2026,

Concerning paragraph 118, the Commission fully recognises the importance of adapting its defence and defence-industrial policy instruments to ensure effective support for the development of drone and counter-drone capabilities. The Action Plan on Drone and Counter-Drone Security sets out a cohesive and strategic approach, consolidating and mapping all relevant EU initiatives in this domain to ensure alignment, consistency, and synergy, while accounting for the unique requirements of the defence sector.

– having regard to Rule 55 of its Rules of Procedure,

As regards paragraph 137, the Commission and the High Representative share the Parliament’s assessment that the rapid evolution of drone technologies, their largely dual-use nature and their increasing use in hybrid and military contexts require a more integrated European response. Recent developments, including lessons drawn from ongoing conflicts, confirm that drone-related threats simultaneously affect internal security, the protection of critical infrastructure and defence, and therefore call for more coherent responses at Union level. The Commission considered the outlined priorities during the preparation and integrated them into the recently published Action Plan on Drone and Counter-Drone Security. The Action Plan will place particular emphasis on strengthening civil-military convergence, with a view to improving shared situational awareness and supporting Member States’ efforts on drone and counter-drone capabilities, including associated detection, command, coordination and protection functions. The Commission proposed EU flagship projects in the area of drones, the European Drone Defence Initiative and Eastern Flank Watch, and invited Member States to consider European defence projects of common interest in this area in the context of EDIP to reinforce and improve an interoperability of European drone defence capabilities. It will also aim to better align existing EU efforts to reduce fragmentation, promote greater coherence between capability priorities, innovation and industrial efforts, and foster interoperability of systems and procedures, recognising the inherently cross-border nature of drone-related threats and their potential to affect several Member States simultaneously. This approach will strengthen the Union’s collective ability to anticipate and manage complex and hybrid threat scenarios. The Action Plan will seek to reinforce coordination and solidarity at EU level, in support of Member States when the scale or nature of drone-related threats exceeds national capacities, while fully respecting Member States’ responsibilities. By combining strategic coherence, civil–military complementarity and a targeted use of existing instruments, this approach will contribute to enhancing the Union’s collective security, while preserving the conditions for the development of legitimate drone uses and Europe’s technological competitiveness.

– having regard to the report of the Committee on Economic and Monetary Affairs (A10-0167/2026),

On paragraph 140, the Commission shares the objective of developing strategic reserves and stockpiles of critical components and materials for UAS, Unmanned Surface Vehicle (USV) and Unmanned Underwater Vehicle (UUV) systems to enhance the resilience of the European Defence Technological and Industrial Base (EDTIB). Through the EDIP, the Commission will have the possibility to support Member States in building and maintaining such reserves, leveraging the new EU-wide security of supply regime. This framework will enable targeted stockpiling of essential components while ensuring rapid crisis response for defence industrial readiness. To further strengthen this effort, the Commission will assess and enhance its understanding of Europe’s current and planned industrial production capacities, with a particular focus on drone and counter-drone systems, to ensure that industrial capacities align with strategic needs. Furthermore, the Commission and interested Member States are collaborating on a pilot project on the stockpiling CRMs to develop an effective and coordinated approach to stockpiling CRMs within the EU.

A. whereas the EU, as the largest integrated market in the world, with more than 450 million consumers, is losing its economic competitive edge4 owing to the confluence of structural weaknesses, the increasingly intense global competition to attract capital, businesses and talent, and a complex and fragmented regulatory framework;

Concerning paragraph 147, the Commission takes note of the Parliament’s invitation to make use of funding programmes such as SAFE to highlight the need for EU countries to develop their drone industry. Procurement projects supported by SAFE based on Member States’ national plans will provisionally allocate EUR 7 billion to projects related to drones and counter-drones.

B. whereas economic competitiveness – at the core of most relevant EU policies and of urgent political priority, indicated by internal market integration, productivity growth, substantial public and private investment, and the digital and green transitions – may bolster the EU’s prosperity by creating high-quality jobs, sustain our economic and social model, and consequently invigorate the welfare of our people and societies;

Regarding paragraph 188, the Commission attaches the utmost importance to informing the public about measures related to security and defence. Current communication initiatives focus on explaining existing policy framework and initiatives and aim to foster informed public debate, build trust, and ensure democratic accountability. The Commission is also actively communicating about what the EU is doing in the field of defence and security, including initiatives concerning both drone and counter-drone related technologies, and is stepping up these efforts towards stakeholders and citizens.

C. whereas internal trade barriers in the EU’s single market are estimated to be the equivalent of a tariff rate of 44 % for goods and 110 % for services5, which continue to represent a significant burden for business growth and investment in the EU and highlight the cost of regulatory fragmentation, and the need to move towards a more integrated, simplified and ambitious framework;

In respect to paragraph 190, the Commission notes that in March 2025 the Union of Skills was proposed, calling for the strengthening and streamlining of the Pact for Skills to support strategic sectors in their up and reskilling, including through the Large-Scale Partnerships. Reinforcing the Large-Scale Partnerships will support the development of sector-specific solutions, tackle fragmentation of initiatives and improve linkages between them. The Pact for Skills partnership focusing on the aerospace and defence industry is led by the Aerospace, Security and Defence Industries Association of Europe (ASD) and committed to work across three main areas: skills forecasting, up and reskilling programmes and talent development and engagement. Furthermore, the ASSETs+ Erasmus Blueprint project aims to dispel myths and biases associated with the defence sector while designing new courses and challenges for students.

D. whereas the capacity to deliver greater harmonisation in the field of taxation, and of the regulatory framework, remain restricted by the unanimity requirement applicable to this policy area; whereas further harmonisation and the deepening of the internal market are instrumental in boosting EU competitiveness and delivering reductions in the administrative burden and cost of cross-border economic activity; whereas diminishing loopholes for aggressive tax planning and other tax avoidance practices should be instrumental in boosting EU competitiveness as envisaged in the ‘One Europe, One Market’ agenda;

On paragraph 199, the Commission is currently reviewing the existing EU Skills Academies in various sectors to assess factors of success. Based on this analysis, a targeted number of academies in strategic sectors – among others defence - will be rolled out to deliver the skills needed by industry for the green and digital transition and the Clean Industrial Deal. In the framework of the Defence transformation roadmap, the Commission has proposed to leverage existing EU online academies to foster defence-related skills in line with EU industry needs and strategic priorities. Building on this foundation, it will explore the establishment of a standalone EU Defence Industry Skills Academy from 2028 onward.

E. whereas boosting the EU’s competitiveness is closely connected to consolidating its strategic autonomy and being able to reduce external economic dependencies in strategic and critical sectors;

Concerning paragraphs 246 and 247, the Commission notes that the Staff Working Document accompanying the Military Mobility Package adopted in November 2025 highlights that fragmentation and limited availability of testing, validation and demonstration capacities constitute a barrier to the development, integration and operational uptake of emerging dual-use and civil-defence technologies. In response, the Commission, together with the EDA, is taking action to support the development of a Union-level civil-defence drone testing and demonstration network. Besides, the Commission is financially supporting alternatives for certified drones testing facilities that industries from Member States can leverage. The EDF, including via EUDIS, SAFE and EDIP dedicate significant attention to ease access from SMEs and innovative start-ups.

F. whereas enterprises in the EU, specifically small and medium-sized enterprises (SMEs), start-ups and scale-ups, and their innovative potential are structurally stifled by the persistent fragmentation of regulatory frameworks between Member States; whereas regulatory and tax diversity and the associated costs of navigating unfamiliar, distinct and often incompatible national environments hinder the pan-European financing and scaling up of companies, and whereas there is an urgent need to address this competitiveness gap6; whereas a favourable, predictable and proportionate regulatory environment is essential to enable companies to invest, grow and compete globally; whereas the EU should strengthen its commitment to entrepreneurial freedom and the removal of barriers; whereas by providing a harmonised framework, the 28th regime would facilitate EU SMEs access to capital, contribute to reducing economic and territorial disparities in the EU, ensure balanced access and development conditions across different regions, and make it easier for investors to provide funding to companies located in another Member State;

Regarding paragraph 250, the Commission agrees with the Parliament on the importance of reducing administrative burdens. In June 2025, the Commission presented the ‘Defence Readiness Omnibus’ simplification package that aims at introducing simpler, leaner and faster conditions for the transfer of defence-related products within the EU, a simplified permitting regime for defence-related projects, a reduction of the administrative burden to apply for EDF programmes, simplified reporting to comply with the REACH regulation on chemicals, as well as a clarification of eligibility of defence investments to access InvestEU and private funding.

G. whereas the overall administrative burden reduction of the proposed regulation establishing the 28th regime is estimated at between EUR 328 million and 440 million over a period of 10 years7;

As regard paragraph 255, the Commission recognises the crucial need to strengthen civil-military airspace coordination, especially with the integration of drones into U-space corridors under the Single European Sky initiative. The ongoing collaboration between the EDA, SESAR JU, SESAR Deployment Manager, the European Union Aviation Safety Agency (EASA) and the European Commission is set to focus specifically on facilitating the insertion of civil and military drones into non-segregated airspace, addressing the related safety and security challenges that arise from these operations.

H. whereas for SMEs, small mid-caps, start-ups and scale-ups, the difficulties in understanding the different business environments in the EU – including owing to language barriers, lack of access to information or rules and requirements, taxation issues and business authorisation – represent the most significant barriers to their cross-border operations and to scaling up within the EU; whereas taxation, particularly issues relating to Value Added Tax (VAT), permitting and authorisations make up the main obstacles to their scaling up in other EU countries8;

On paragraph 283, the Commission will examine ways to promote the use of standards applicable to civilian and military drone and counter-drone technologies, with a view to improving interoperability by leveraging instruments such as the EDIP and the EDF. This will build on ongoing work by the EASA, the EDA and the NATO to align civil-military standards.

I. whereas as of 2025, Europe only had 331 unicorns compared to 1 963 in the United States and whereas between 2008 and 2021, close to 30 % of European unicorns relocated their headquarters outside the EU; whereas a large proportion of companies are leaving the EU to find the necessary capital in other jurisdictions; whereas this is due to better access to large markets, a supportive business environment, better access to venture capital, heightened availability and mobility of talented and skilled workers, an unfragmented regulatory framework and a less complex tax environment, and the wider availability of employee ownership schemes, which would be conducive to cross-border investment and to attracting and retaining economic and industrial activity within their economies9;

Concerning paragraph 290, the Commission notes that the Military Mobility Package aims to establish a comprehensive set of measures to ensure the swift, coordinated and secure movement of military personnel and equipment within the Union and across the external borders. The proposed measures are designed to support interoperability and complementarity with NATO, while respecting the Union’s decision-making autonomy. After identification by Member States, an EU toolbox of protective measures complementing the Critical Entities Resilience (CER) Directive will ensure the protection of strategic dual-use infrastructure. This is complemented by efforts to support innovation and integration in the drone domain, notably through the establishment of an EU network of civil-defence drone testing centres, the development of a joint civil-military drone framework for airspace integration based on common standards and procedures, and the creation of a European regulatory framework for Counter-unmanned aircraft system technologies. Further initiatives include regulatory sandboxes under the EASA Basic Regulation, a harmonised certification framework for large drones, and closer cooperation between EASA and national military aviation authorities. The European Union Military Staff (EUMS) also provides unique military expertise on military mobility infrastructure developments while also has a formal cooperation and exchange of information with NATO to ensure alignment of efforts.

J. whereas, as mentioned in the Draghi report, for innovative companies, ‘a voluntary 28th company rulebook harmonising legislation concerning corporate law, insolvency, as well as a few key aspects of taxation, to be made progressively more ambitious, could be explored under enhanced cooperation by willing Member States’10;

As regards paragraph 298, the Commission notes that as enlargement is a geostrategic imperative, it is important to keep enlargement partners firmly anchored to the EU also through close security cooperation. There is ongoing work within the European External Action Service (EEAS) to expand opportunities for the participation of the Western Balkans partners in the Common Security and Defence Policy (CSDP), other security initiatives and joint work on resilience to cyber and hybrid threats, including disinformation. Against this backdrop, the Commission stands ready to facilitate cooperation and dialogue where appropriate for Member State-led initiatives, such as the European Defence Drone Initiative project.

K. whereas, as stated in the Letta report, tax is another area where complexity is a major barrier to cross-border trade and investment, and regulatory fragmentation may turn the single market into an obstacle for SMEs; whereas the report identifies the 28th regime as a key tool to enable them to fully benefit from the single market11;

On paragraph 312, the Commission and the High Representative welcome the Parliament’s call to further support, invest in and partner with the Ukrainian defence industry, recognising its critical role in strengthening Europe’s collective security. The experience of Russia’s war against Ukraine has demonstrated the scale, speed and adaptability of Ukraine’s defence industrial base, particularly in the field of drones and counter-drone systems, as well as its capacity to translate operational lessons rapidly into industrial output. The Commission remains committed to continue supporting Ukraine with the means and tools it has available, including through the implementation of the USI under the EDIP, as well as the Ukraine Support Loan. The experience of Russia’s war of aggression against Ukraine has demonstrated the scale, speed and adaptability of Ukraine’s defence industrial base, particularly in the field of drones and counter-drone systems, as well as its capacity to translate operational lessons rapidly into industrial output. In this context, the Commission and the High Representative will continue to work towards deepening EU-Ukraine defence industrial cooperation, including through closer partnerships between both industries. This cooperation is envisaged as a mutually beneficial process, aimed at making more efficient use of existing production capacities, supporting industrial scale-up, and facilitating joint development, co-production and procurement efforts, in line with Member States’ initiatives and existing EU instruments. Building on Ukraine’s operational experience and innovation cycles, this approach will also contribute to strengthening Europe’s own industrial and defence readiness as well as its resilience. It will support closer integration between operational feedback, capability development and industrial production, while taking into account supply-chain security, interoperability and sustainability. In doing so, the Union will reinforce its long-term defence industrial cooperation with Ukraine, in a manner consistent with agreed priorities and respectful of Member States’ competences.

L. whereas the tax dimension of the 28th regime should respect the competence framework provided for by the Treaties and be designed to support the full life cycle of companies; whereas the Draghi report shows that the EU lacks venture capital investment at each development stage of start-ups (seed, early stage and late stage) as a result of a lack of scaling possibilities;

M. whereas the potential benefits of an optional pan-European business regime, vastly simplifying the whole process of future expansion to new markets, both within and outside of the EU, lie in enhanced legal certainty, lower compliance costs and simplified regulatory and tax procedures, and a level playing field with competing jurisdictions outside the EU; whereas it is necessary to ensure clarity and legal certainty for European and foreign investors by providing simpler and better harmonised rules, including in the area of taxation, that enable them to invest cross-border with confidence;

N. whereas to address these policies and political goals, the EU and its Member States must act using a coordinated, ambitious and results-oriented approach;

O. whereas completing the Savings and Investments Union is essential to mobilise private capital in the EU and channel it efficiently into the economy, in particular towards SMEs, start-ups and scale-ups; whereas a deeper, more integrated and more accessible capital market would improve access to finance and encourage long-term investment; whereas further integration of European financial markets is key to strengthening the EU’s competitiveness, preventing the flight of companies to other jurisdictions and ensuring that European savings finance growth and innovation within the single market;

P. whereas the additional modules, stemming from the 28th regime, may play a role in supporting the cross-border development of long-term savings and pension products; whereas, in the context of taxation, such regimes should interact coherently with national tax frameworks;

General principles

1. Welcomes the Commission’s legislative proposal on a 28th regime (‘EU Inc.’) for companies; recognises its potential systemic impact on the functioning of the single market and the overall competitiveness of the EU’s economy; underlines, however, that the proposal on the 28th regime must not constitute a replacement for any further legislative efforts to reduce fragmentation and disparities between the regulatory frameworks of Member States;

2. Highlights its adoption of a resolution with recommendations to the Commission on the 28th regime: a new legal framework for innovative companies;

3. Welcomes the adoption of the ‘One Europe, One Market’ agenda to unlock the potential of the single market; takes note of the European Council’s call for the adoption of a 28th regime for company law; notes the European Council’s lack of references to targeted tax policy harmonisation under this agenda, particularly given that SMEs selected tax and VAT fragmentation as the most prevalent barrier to scaling up;

4. Stresses the fact that taxation is in most cases an exclusive competence of the Member States, yet there is – particularly in terms of procedures – a space for further simplification or targeted harmonisation tackling different compliance regimes, complex and fragmented corporate tax treatment, reporting obligations and administrative barriers in the treatment of cross-border investment; highlights the positive contribution of previous EU legislative initiatives on taxation, particularly in tackling tax evasion, avoidance and fraud, which are complementary to national legal frameworks;

5. Calls for the 28th regime initiative to be ambitious in its substance, including on taxation aspects, all the while fully respecting the Treaties, in order to allow SMEs, small mid-caps and innovative companies to scale up and operate seamlessly without transnational barriers across the EU’s single market;

6. Underlines that the 28th regime must not, under any circumstances, enable the circumvention of mandatory domestic protection of workers, their social rights, representatives and trade unions, nor become a vehicle to undermine, reduce or weaken existing levels of protection at EU or national level; highlights that the 28th regime should support innovation, transparency of company policies and the dimensional growth and scalability of companies by encouraging the removal of legal and tax obstacles that limit cross-border development and expansion as well as tax fairness, while effectively preventing tax, social and regulatory disparities;

7. Stresses that the benefits of digitalisation and the simplification of compliance requirements that will be introduced under the tax module of the 28th regime (hereinafter the ‘tax module’) should be made available to all companies under ‘EU Inc.’;

8. Considers that the 28th regime is a strategic step towards the further deepening of the single market, thereby advancing European integration and improving the functioning of the single market and its competitiveness;

9. Stresses that the 28th regime should be established through a modular approach; understands that the proposed regulation establishing a corporate legal framework (‘EU Inc.’) is a first step onto which other modules can be added, including on taxation (tax module); considers that these future modules should cover relevant aspects of the entire life cycle of companies, and be continuously evaluated against international benchmarks;

10. Considers that the tax module could be added to the legislative proposal for a regulation establishing a corporate legal framework (‘EU Inc.’), which should extend into the field of taxation, in a targeted, ambitious and proportionate manner; considers that the potential benefits of the tax module include lower compliance costs, simplified regulatory procedures, enhanced legal certainty, predictability and smoother access to cross-border markets, thereby improving and deepening the European single market;

11. Notes that for a tax module to be attainable under the existing Treaty framework, and where the applicable legislative procedure does not yield results, either an opt-in structure of the relevant legislation, or enhanced cooperation as a last resort, should be considered in order to address tax policy shortcomings; notes that tax policy remains subject to unanimity in the Council of the EU; is of the opinion that transitioning to the use of qualified majority voting is necessary in certain aspects of tax policy such as in the implementation of international agreements signed by all Member States, certain administrative procedures or legal definitions, in order to prevent unanimity from limiting regulatory harmonisation- and stopping citizens and businesses from fully benefiting from the single market; notes that such a module should be designed as an optional, clear and legally secure system, open to the accession of other Member States at any time, avoiding further fragmentation and ensuring the coherence of the single market;

12. Insists that the 28th regime must effectively reduce compliance complexity for participating companies and must not create a parallel rulebook layered on top of national legal systems leading to increases in legal distortions, overlaps or inconsistencies, or additional administrative burden; recalls that the primary goal of the new regime is simplification and competitiveness, and that these must be ensured at all times while striving for upward social convergence;

13. Emphasises that the objective of both the 28th regime and its tax module is not to create an unfair tax advantage for companies or their employees, but to substantially reduce the complexity and administrative burden arising from different obligations, while respecting the specific characteristics of such companies;

14. Emphasises that in order to avoid further complexity, the provisions of the 28th regime should be in line with any other major proposals of the Commission and relevant Organisation for Economic Co-operation and Development (OECD) guidelines regarding greater integration within the single market, namely in the field of taxation and applicable tax legislation, notably in EU anti-avoidance and anti-evasion frameworks, including the Anti-Tax Avoidance Directive12 (ATAD);

15. Calls for a modular and pilot-based approach for the 28th regime with corporate law in the forefront; stresses that those modules must effectively reduce compliance complexity for participating companies, yet insists upon the adoption of a road map, regarding what should be added and when, to be known at the outset and continuously adjusted under a periodic democratic review process;

16. Emphasises in this context that, aiming to ensure (political) feasibility and in order to preserve Member States’ control over a substantial part of their tax policy as provided for under current legal frameworks, the scope of the tax module should be limited to, as a starting point, a subset of companies, such as cross-border growth-oriented start-ups and scale-ups, which typically generate only limited corporate income tax revenues for Member States; takes note of the Commission recommendation of 18 March 2026 establishing a definition of such companies using criteria such as their research and development (R&D) expenditure and size, which accompanied the ‘EU Inc.’ proposal;

17. Underlines that all tax incentives within the framework of the 28th regime must be fully compatible with State aid rules and designed in a way that avoids harmful tax competition, while ensuring a level playing field within the single market;

18. Reiterates that companies which voluntarily opt into the 28th regime and its tax module should be bound by its rules and that their choice to opt in must be automatically recognised by all Member States’ legal frameworks, allowing them to operate like any other nationally registered company in any Member State’s market; recalls that entry into the 28th regime should be optional, yet the exit from it should be mandatory upon the achievement of clearly defined criteria, including an initial public offering; highlights in this context that the non-discrimination principle vis-à-vis national company legal forms should be applied;

19. Notes that conditions of exit must be established for companies deciding to opt out on their own initiative, including notice requirements, possible minimum participation periods, and the entry into force of the withdrawal and that, once the relevant criteria for exit are met, sufficient time must be provided to allow for the necessary transformation of companies, ensuring a predictable and gradual transition while minimising the opportunities for regulatory arbitrage;

20. Acknowledges that legal form neutrality and fiscal non-discrimination are essential in ensuring sufficient demand for the regime; calls on the Commission, if necessary, to amend the EU acquis related to taxation, whether directly or indirectly, in order to ensure that companies operating under the 28th regime can fall within their own scope, and to simplify and further harmonise the procedures for accessing the benefits of those directives;

21. Is of the opinion that in the early stages of a company’s life cycle, speed and simplicity, without the need to establish separate legal forms in each of the Member States, are crucial to transform an innovative concept into a viable entity; stresses that for the 28th regime a single, fully digital registration at the One-Stop Shop, along with the provision of a single tax number, including fully standardised documentation, templates and a single tax-filing interface, and respecting an English-first principle for communication, without compromising the EU’s other official languages, should be set by default; recalls that the 28th regime should combine clear legal architecture, meaningful and ex ante quantifiable benefits to companies, and robust institutional support; highlights the synergies with the proposal on the establishment of European Business Wallets (COM(2025)0838), designed to establish a seamless and secure environment for digital interaction between economic operators and public sector bodies;

22. Notes that the One-Stop Shop, or alternatively a different central hub, should also function as a digital platform supporting companies throughout their life cycle within the 28th regime and its various modules; highlights that it should provide streamlined access to relevant regulatory, tax and administrative information across Member States, ensuring transparency and legal certainty, as well as including the possibility of incorporating, managing and dissolving activities;

23. Without prejudice to any further protective measures, emphasises that anti-tax avoidance measures laid down by current EU law must be applied thoroughly; stresses that only companies with real economic activities within the EU should have access to the tax module and that this module should not lead to the creation of shell or letterbox companies, as such practices undermine regulatory integrity, distort fair competition and erode genuine economic activity within the EU; underlines that the tax module should not become a tool for ‘tax shopping’ and must, under no circumstances, become a vehicle to unduly reduce or circumvent current levels of taxation at EU or national level;

24. Considers that a company for which infringement has been officially established of binding rules regarding fraud, tax, social security evasion or employee participation should be ineligible to opt in to the tax module;

25. Highlights that a transparent, accountable and efficient financial reporting framework is a necessity, and that the Single Accounting Standards should be applied by default for all companies operating under the 28th regime across all participating Member States, building on internationally recognised standards such as International Financial Reporting Standards where appropriate;

Taxing corporate income

26. Is of the opinion that the lack of corporate tax policy harmonisation represents a significant obstacle to cross-border economic activity within the EU, while also increasing risks of aggressive tax planning; proposes therefore that to provide a clear, effective and transparent tax regime, the future tax module should aim for a single consolidated corporate tax base for participating companies across the EU; recalls earlier initiatives, such as the Common Corporate Tax Base, the CCCTB, BEFIT, and the Head Office Tax System for SMEs model, and proposes that the tax module provide a uniform method for determining taxable income in line with OECD guidelines, thereby eliminating fragmentation in tax base calculation and reducing cross-border uncertainty; stresses that the tax module must not further limit the discretion of Member States to set corporate tax rates; stresses that the 28th regime should prioritise genuine consolidation in order to ensure the effective cross-border offset of losses, thereby incentivising cross-border investment;

27. Notes that, pointing towards the debt-equity bias reduction allowance proposal, the module should promote neutrality between debt and equity financing, so as to remove structural tax biases and strengthen equity-based investment, which is particularly important for start-ups and scale-ups relying primarily on equity financing in the early stages of their development;

28. Proposes that the 28th regime should seek to simplify tax administration and reduce cross-border uncertainty, including, where possible, by standardising tax returns, avoiding duplicative returns, and improving communication among tax authorities and the application of the ‘digital first’ principle;

29. Proposes that the consolidated tax base be appropriated among the Member States using a pre-agreed formula reflecting real economic activity, such as sales, labour, tangible assets and digital presence, replacing complex intra-group transfer pricing disputes within the regime with a transparent allocation method in line with OECD guidelines; stresses that this would be both a simplification and a tool to fight tax avoidance;

30. Recalls that tax rates must remain within Member States’ competence; notes, however, that they could be filed through a single filing interface;

31. Stresses that double taxation must be effectively prevented through, for instance, the uniform definition and classification of capital gains, intra-regime payments or the automatic mutual recognition of tax status;

32. Proposes that Member States should consider introducing special panels within their national courts dedicated to disputes regarding the tax module, and that it should be possible for such panels to conduct dispute resolution in English;

33. Highlights that cross-border scaling up may entail frequent corporate mobility events and reorganisations, and that, with the intention of benefiting from the current framework for tax-neutral operations, the tax module should involve the extension of current EU law and address mobility-related tax frictions through enhanced administrative coordination and greater substantive certainty, while ensuring that any simplification measures remain subject to appropriate safeguards against abuse13;

Value added tax

34. Emphasises that to reduce compliance burdens, regime participants must operate under a centralised VAT framework, where a single EU VAT number and digital One-Stop Shop14 portal must cover declarations and refunds across the Member States, including through timely and efficient refund procedures and a reduced need for multiple registrations; highlights the importance of promoting the use of interoperable digital solutions, including e-invoicing, to simplify compliance, enhance transparency and reduce administrative costs; recalls that the objective under the tax module should be procedural simplification rather than the harmonisation of VAT rates, enabling companies to expand without multiplying administrative interfaces;

Withholding tax

35. Highlights that cross-border capital flows within the module should benefit from more coordinated and efficient treatment, whereby dividends, interest and royalties between participating entities and their associated investment vehicles should benefit and be subject to a common simplified withholding tax procedure and minimum effective taxation; proposes that immediate recognition of tax residence must be achieved through a centralised EU digital registry, enabling streamlined digital clearance procedures and eliminating manual refund delays identified as a key barrier to scaling in the EU15;

36. Calls for the development of a clear and transparent definition of beneficial ownership for tax purposes that would identify real owners of firms, or at least a comprehensible and broadly accepted set of criteria upon which withholding tax relief should be offered at source, and lengthy refund procedures should be avoided, yet maintained in situations when none of the criteria are met;

Employee taxation

37. Welcomes the Commission proposal for the optional use of EU employee stock options within the wider ‘EU Inc.’ proposal and in particular its principle that taxation should occur at disposal and benefit from the same tax treatment as applicable to other employee stock options or similar instruments under national law; believes, however, that the implementation of an EU employee stock option scheme should be mandatory under the tax module; notes that gains should be treated as capital income rather than employment income, therefore aligning employee incentives with long-term company growth and removing the distorting effect of upfront taxation; supports addressing the question of convertibility with stock options schemes across Europe to ease the conversion of existing companies to the 28th regime;

38. Stresses the role of employee share schemes and similar mechanisms in creating incentives for attracting talent and key personnel within such companies; highlights that key personnel include founders and other essential employees whose skills and expertise are critical to the company’s development; emphasises that a transparent, economically sound and predictable tax regime for such instruments is essential to retain these companies within the EU and to attract and retain talent on terms comparable to those available in other competing jurisdictions;

39. Calls for a standardised EU valuation method providing safe harbour rules to determine share and stock option value in non-listed companies, preventing retroactive reassessments and reducing legal uncertainty; considers that such valuations should be recognised by participating tax administrations unless abuse, fraud or manifest error is demonstrated;

40. Recalls that social security contributions and pension income taxes applicable to workers carrying out their activities in more than one Member State are set by the multi-state worker framework under Article 13 of Regulation (EC) No 883/200416, whereby the applicable legislation is determined in accordance with a number of factors, thereby enhancing legal certainty and reducing cross-border administrative burdens;

41. Calls for targeted rules to ensure tax certainty for employees who move between Member States, during the period between the granting of employee equity and the sale of the underlying shares, including through streamlined one-stop digital employer reporting as well as the avoidance of double or multiple taxation at the point of sale of employee equity; stresses that any allocation of taxing rights should remain proportionate, simple and predictable;

Transfer pricing

42. Regrets that although all Member States have national legislation in line with OECD transfer pricing guidelines, the application of those guidelines remains divergent due to the absence of an EU transfer pricing directive; stresses that in order to prevent compliance costs from becoming a structural barrier to expansion, transfer pricing complexity should be substantially reduced; considers that there is a need to draw on elements of the CCCTB to provide a coherent basis for a unified European tax framework; proposes, within the tax module, that the Commission should clearly specify the transfer pricing rules applicable to companies opting into the 28th regime, and include coordinated safe harbours which should apply to routine intra-group services and low-risk transactions, and harmonised approaches that should apply to intellectual property licensing and cost allocation to limit disputes, while documentation requirements should be proportionate to company size and growth stage;

Access to capital

43. Calls for the harmonisation of capital gains definitions and treatment, as well as efficient mechanisms for the prevention of double taxation and to reduce cross-border uncertainty; suggests an assessment of the possibility of establishing a single digitally verified status of investors based on a set of common standards, to ensure that their eligibility is automatically recognised across all Member States in order to ease cross-border investments; is of the opinion that standardised investment instruments, including harmonised, convertible financing templates and model shareholder agreements, should be introduced to reduce transaction costs and legal uncertainty, while strengthening investor protection and market transparency;

44. Stresses that one of the goals of the new regime is to contribute to the development of a genuine EU capital market, enabling firms under its scope to obtain the necessary funding while maintaining their presence in the EU; underscores therefore the need to mobilise the high volume of savings in the EU towards the aforementioned investments, in particular by developing attractive and accessible investment products for retail investors, while preventing the risk of such savings being channelled towards non-EU jurisdictions; stresses that the tax module must facilitate the closing of the current funding gap in the EU;

45. Emphasises that the 28th regime should directly address structural obstacles that limit capital mobilisation in Europe; recalls that from an investor perspective, regulatory and prudential alignment must be ensured; considers that the 28th regime should contain harmonised rules on equity-like debt instruments, including insolvency rules linked to those instruments, enabling investors to invest in a company without acquiring rights of control over that company;

Tax incentives

46. Stresses that the tax module should introduce appropriate coordinated and strictly conditioned tax incentives focused on research, development and reinvestment; notes that a harmonised baseline for R&D incentives should establish common eligibility definitions and minimum standards across Member States, including but not limited to social conditionality, regular monitoring and evaluation tools of tax expenditure to ensure that: (i) they are fit for purpose; (ii) they are a cost-effective way of fostering innovation; and (iii) they have no unexpected or negative implications; emphasises that firms opting for the tax module should not be disadvantaged in accessing Member State programmes or incentives on the basis of their legal form;

47. Stresses furthermore that the design of R&D incentives under the tax module must be explicitly calibrated to align with the OECD Pillar Two global minimum tax framework, and in particular that the interaction with the Qualified Refundable Tax Credit rules must be addressed to ensure that firms under the scope of the tax module – which may have no current profits – can nonetheless fully benefit from the incentives without disproportionate administrative burden;

48. Recalls the need for strong stimulation of scale-up activities; believes that where reinvested profits are used for R&D, digitalisation or green innovation should be eligible to receive temporary additional deductions or tax deferrals, thus incentivising the redirecting of retained earnings towards productivity-enhancing investment rather than short-term distribution, in order to boost technological capacity and competitiveness; highlights that all incentives must be designed to remain transparent, simple and compliant with State aid rules;

Impact assessment, review and evaluation

49. Calls on the Commission to ensure a comprehensive review and, where necessary, revisions of tax aspects of the 28th regime at regular intervals, including the potential to add new module legislation to the regime, an assessment of its adoption rates among companies, particularly SMEs, start-ups and scale-ups, and of their development and economic growth, its alignment with evolving business and societal needs, its overall fitness for purpose and its effect on the EU’s competitiveness (international benchmarking); considers that the review cycle should occur every four years to ensure adaptability to new challenges;

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50. Instructs its President to forward this resolution to the Council and the Commission.

EXPLANATORY STATEMENT

The main rationale for establishing the 28th regime, a new corporate legal framework for emerging and existing innovative companies, start-ups and scale-ups including tax provisions, is to bolster competitiveness, resilience and strategic autonomy of the European Union in a radically changing global market. This new regime aims to strengthen the EU’s competitiveness through supporting innovative companies and closing existing innovation gaps particularly vis-à-vis the United States, China and other fast-growing markets, thereby, ultimately, enhancing prosperity and improving living conditions of EU’s citizens.

Its intention is not to harmonise the existing legal and regulatory frameworks for companies between Member States, which have evolved over time and continue to do so. Instead, it aims at complementing them by providing an optional framework for a specific group of companies responding to the rapidly shifting dynamics of economic competition, thus addressing their specific needs – including on tax matters.

The 28th regime shall be one of the resourceful tools for achieving the goals set out in the Savings and Investment Union, because in its very nature it shall:

• simplify access to higher-risk capital for SMEs, start-ups, and scale-ups and, at the same time, increase investors’ confidence by creating a more predictable environment, thereby enhancing investment protection and providing mechanisms to deal with potential losses;

• stimulate private investment into R&D, particularly in those sectors, that are crucial for future growth (e.g. digital services and artificial intelligence);

• eliminate major existing barriers to scaling up fast-growing innovative companies, which due to current regulatory hurdles, might otherwise relocate to other regions of the world offering a more suitable regulatory environment for their growth; and

• remove the fragmented regulatory and tax framework, which currently represents one of the most significant and often impassable (cost-ineffectiveness) burdens for fast-growing companies.

The Subcommittee on Tax Matters, being aware of the role of taxation in fostering more integrated financial markets within the European Union, recognises that the current fragmentation of tax systems among Member States places a burden on SMEs, start-ups and scale-ups, particularly for their growth and cross-border operations. At the same time, being conscious of the political sensitivity of taxation at both European and national levels, the Subcommittee aims to describe the major obstacles in the field of taxation, and outline viable options on how to overcome them, by proposing the possible design of a 28th tax regime for a particular subset of, or eventually, all companies, with the aim of strengthening the European Union’s competitiveness.

ANNEX: DECLARATION OF INPUT

The rapporteur declares under his exclusive responsibility that he did not include in his report input from interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register1, or from representatives of public authorities of third countries, including their diplomatic missions and embassies, to be listed in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

Date adopted

3.6.2026

Result of final vote

+ : 36

- : 18

0 : 1

FINAL VOTE BY ROLL CALL BY THE COMMITTEE RESPONSIBLE

36

+

PPE

Georgios Aftias, Isabel Benjumea Benjumea, Stefan Berger, Gheorghe Falca, Marco Falcone, Markus Ferber, Dirk Gotink, Michalis Hadjipantela, Monika Hohlmeier, Kinga Kollár, Fernando Navarrete Rojas, Ludek Niedermayer, Giusi Princi, Paulius Saudargas, Andreas Schwab, Flavio Tosi

Renew

Engin Eroglu, Gerben-Jan Gerbrandy, Ludovít Ódor, Anouk Van Brug, Stéphanie Yon-Courtin

S&D

Matthias Ecke, Jonás Fernández, Eero Heinäluoma, Marina Kaljurand, Aurore Lalucq, César Luena, Ana Catarina Mendes, Nikos Papandreou, Evelyn Regner, Irene Tinagli

The Left

Gaetano Pedulla', Jussi Saramo

Verts/ALE

Damian Boeselager, Vladimir Prebilic, Marie Toussaint

18

-

ECR

Stephen Nikola Bartulica, Giovanni Crosetto, Denis Nesci, Guillaume Peltier, Ruggero Razza, Bogdan Rzonca, Mariateresa Vivaldini

ESN

Siegbert Frank Droese, Volker Schnurrbusch

NI

Fabio De Masi, Katerina Konecná

PfE

Mireia Borrás Pabón, Jaroslav Knot, Tomás Kubín, Jaroslava Pokorná Jermanová, Antonín Stanek, Annamária Vicsek

Renew

Billy Kelleher

1

0

PfE

Paolo Borchia

Key:

+ : in favour

- : against

0 : abstentions