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BUDGETARY ASSESSMENT

29.01.2024

for the Committee on Economic and Monetary Affairs on the proposal for a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT)

Ms Evelyn Regner, rapporteur

((COM(2023)0532 – C9-0341/2023 -2023/0321(CNS))

Mr Paul Tang, Chair of the FISC subcommittee

The Committee on Budgets has carried out a budgetary assessment of the proposal under Rule 58 of the Rules of Procedure and has reached the following conclusions:

Ms Irene Tinagli, Chair of the ECON Committee

The Committee on Budgets,

Subject: Opinion on Business in Europe: Framework for Income Taxation (BEFIT) (2023/0321(CNS))

1. Recalls that businesses benefit from the Union single market, harmonised policies and regulatory framework, which enhance their international competitiveness; considers it fair that a share of their profits contributes to, or is deemed to contribute to, the Union budget accordingly; highlights that the ‘Business in Europe: Framework for Income Taxation’ (BEFIT) framework could reduce revenue leakage, as it would provide the EU with more transparent rules on corporate taxation;

Dear rapporteur, dear Chairs,

2. Recalls that over the years Parliament has repeatedly supported Commission initiatives for tax-based own resources such as the Common Consolidated Corporate Tax Base (CCCTB), the Digital Services Tax or the OECD Pillar One approach; regrets that none of these initiatives has so far achieved the necessary support in the Council to bring them into force; calls on the Commission and the Member States to urgently step up the work towards an agreement on those initiatives;

Under the procedure referred to above, the Committee on Budgets’ Coordinators decided at their meeting of 24 October 2023 to adopt an opinion under the Rule 56 in the form of a letter covering the report on Business in Europe: Framework for Income Taxation (BEFIT). Therefore, as BUDG Chair, and together with José Manuel Fernandes and Valérie Hayer, standing co-Rapporteurs for Own Resources, we hereby provide you with the BUDG contribution in the form of resolution paragraphs, which was adopted by BUDG at its meeting of 24 January 2024 and which I kindly request will be taken into account by your committee:

3. Underlines that the roadmap for the introduction of new own resources spelled out in the legally binding Interinstitutional Agreement explicitly mentions a new own resource linked to corporate taxation as part of a basket of new revenue sources; notes that without the introduction of the BEFIT framework it will be difficult to define and adopt any practicable tax base for a new own resource;

1. Recalls that businesses benefit from the Union single market, harmonized policies and regulatory framework; considers it fair that they contribute to the Union budget accordingly;

4. Determines that the proposal for the BEFIT framework is fully compatible with a genuine corporate tax-based own resource as well as with a statistics-based national contribution as proposed by the Commission in the amended proposal for Own Resources Decision (COM(2023)0331) and as endorsed by Parliament in its legislative resolution of 9 November 2023;

2. Considers that, in the absence of corporate taxation at EU level, the system of own resources, by mutualising a small share of the tax base, can serve as a limited but effective proxy mechanism to achieve certain desirable economic outcomes such as fiscal equality, tax justice, diversification and resilience of income sources and automatic stabilisation;

5. Highlights, moreover, that the BEFIT initiative, by establishing a harmonised framework for income taxation, constitutes a viable starting point for the introduction of a new own resource as foreseen in the IIA roadmap; affirms that the introduction of a new own resource consisting of a national contribution based on BEFIT could provide one of the most stable revenue streams for the EU budget, which is under significant strain, particularly due to debt repayment commitments and the increasing spending needs in the context of the multiple challenges the EU is currently facing, including the new geopolitical context; considers that all new Union policies and challenges must involve new financial means and additional fresh resources; underlines that the development of a harmonised framework for corporate income taxation reinforces the sustainability and predictability of the Union budget, while ensuring the viability of the repayment of the debt incurred under NextGenerationEU (NGEU); observes, furthermore, that the modifications of the tax base allocation have been modelled on the OECD Pillar One approach, which has also been proposed as a starting point for the calculation of a corporate tax-based own resource; calls, therefore, on the Member States to swiftly adopt this directive and on the Commission to update the existing proposal for new own resources accordingly;

3. Recalls that the EP has in the past, and on several occasions, supported Commission initiatives for tax-based own resources such as the FTT, CCCTB, Digital Services Tax or OECD Pillar One approach; regrets that none of these initiatives has so far mustered the necessary support in Council to bring them into force;

6. Regrets, nevertheless, that the timeline envisaged for the establishment of BEFIT, including time for Council negotiations, entry into application, transitional period and review would stretch far into the 2030s and would thus be difficult to reconcile with the roadmap and the temporal profile of the NGEU repayment needs; recalls that according to the legally binding IIA roadmap, such an own resource should enter into force by 1 January 2026;

4. Underlines that the IIA Roadmap explicitly foresees a new own resource linked to corporate taxation as part of a basket of new revenue sources; recalls that the EP has recently endorsed the Commission proposal for an own resource conceived as a national contribution based on statistics about the gross operational surplus of companies in the financial and non-financial sectors; holds that such an own resource, coherently conceived, should incentivize Member States to accelerate negotiations and reach a swift agreement on BEFIT;

7. Recalls, in this context, that Parliament has recently endorsed the Commission proposal for an own resource conceived as a national contribution based on statistics about the gross operational surplus of companies in the financial and non-financial sectors (CPOR); holds that such an own resource, coherently conceived, would go hand in hand with the establishment of a more harmonised calculation base which would be considered by Member States as an equitable foundation of an EU revenue source; underscores that a statistics-based national contribution would not depend on any underlying tax directive and could draw directly on the annual aggregate Eurostat figures of gross profits, which would constitute a proxy for a harmonised tax base; considers that such a transitional arrangement might even serve to incentivise Member States to accelerate negotiations and reach a swifter agreement on BEFIT;

5. Highlights that the BEFIT initiative constitutes an excellent starting point for a new own resource as foreseen by the IIA roadmap; stresses that the BEFIT framework should and can be fully compatible with a genuine corporate tax-based own resource as well as with a statistics-based national contribution;

8. Underlines that neither an own resource based on BEFIT nor a statistics-based national contribution should result in any additional burden for companies or lead indirectly to additional taxation of citizens; recalls in this regard that the main objective of the BEFIT proposal is to simplify tax rules, ensure more tax harmonisation in the EU, increase tax certainty and foster a level playing field for EU businesses while strengthening the Single market, cross-border trade and the competitiveness of European companies;

6. Reiterates its call on the Council to adopt without further delay the new own resources meant to cover the repayment of NGEU borrowing costs and to sufficiently fund the Union’s policies and priorities, in line with the Interinstitutional Agreement of 16 December 2020.

9. Regrets the absence of tangible progress in the Council on the introduction of new own resources; reiterates its call on the Council to adopt without further delay the new own resources meant to cover the repayment of NGEU borrowing costs and to sufficiently fund the Union’s policies and priorities; calls on the Commission to go beyond the current proposal on new own resources and to adapt the existing basket to reflect changes in the geopolitical situation, as well as to seek far-reaching political compromises on new own resources proposals; urges the Commission to reflect in its future proposal the principles set out in the roadmap for the introduction of new own resources enshrined in the IIA whereby new own resources should be aligned with Union priorities; is concerned that, without new sources of revenue, up to almost 20 % of the annual EU budget might be sacrificed to cover the repayment costs of NGEU; highlights, in this regard, the commitment under the IIA that the expenditure from the Union budget related to NGEU repayments should not lead to an undue reduction in programme expenditure or investment instruments under the MFF.

Yours sincerely,

ANNEX: DECLARATION OF INPUT

Johan Van Overtveldt,

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur for budgetary assessment declares that she included in her budgetary assessment input on matters pertaining to the subject of the file that she received, in the preparation of the budgetary assessment, from the following interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from the following representatives of public authorities of third countries, including their diplomatic missions and embassies:

Chair of the Committee on Budgets

1. Interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register

José Manuel Fernandes,

Permanent Representation of the Czech Republic to the EU

Standing Co-rapporteur on Own Resources

Business Europe

Valérie Hayer,

2. Representatives of public authorities of third countries, including their diplomatic missions and embassies

Standing Co-rapporteur on Own Resources

The list above is drawn up under the exclusive responsibility of the rapporteur.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur declares that she submitted to the natural persons concerned the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.

PROCEDURE – COMMITTEE ASKED FOR BUDGETARY ASSESSMENT

Title

Business in Europe: Framework for Income Taxation (BEFIT)

References

COM(2023)0532 – C9-0341/2023 – 2023/0321(CNS)

Committee(s) responsible

Date announced in plenary

ECON

15.1.2024

Budgetary assessment by

Date announced in plenary

BUDG

15.1.2024

Rapporteur for budgetary assessment

Date appointed

Danuše Nerudová

28.4.2025

Discussed in committee

19.5.2025

Date adopted

16.7.2025

Result of final vote

+:

–:

0:

22

8

2

Members present for the final vote

Georgios Aftias, Rasmus Andresen, Isabel Benjumea Benjumea, Tomasz Buczek, Olivier Chastel, Tamás Deutsch, Angéline Furet, Thomas Geisel, Jean-Marc Germain, Sandra Gómez López, Andrzej Halicki, Monika Hohlmeier, Alexander Jungbluth, Fabienne Keller, Janusz Lewandowski, Giuseppe Lupo, Siegfried Mureşan, Fernando Navarrete Rojas, Victor Negrescu, Matjaž Nemec, Danuše Nerudová, João Oliveira, Ruggero Razza, Karlo Ressler, Julien Sanchez, Hélder Sousa Silva, Joachim Streit, Carla Tavares, Nils Ušakovs, Lucia Yar

Members under Rule 216(7) present for the final vote

Jaroslav Bžoch, Tiemo Wölken

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR BUDGETARY ASSESSMENT

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