What changed

29.01.2024

SPECIAL LEGISLATIVE procedure

Ms Evelyn Regner, rapporteur

Follow up to the European Parliament legislative resolution on the proposal for a Council directive on Business in Europe: Framework for Income Taxation (BEFIT)

Mr Paul Tang, Chair of the FISC subcommittee

1. Rapporteur: Evelyn REGNER (S&D / AT)

Ms Irene Tinagli, Chair of the ECON Committee

2. References: 2023/0321(CNS) / A10-0194/2025 / P10_TA(2025)0268

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

3. Date of adoption of the resolution: 13 November 2025

Dear rapporteur, dear Chairs,

4. Legal basis: Article 115 of the Treaty on the Functioning of the European Union (TFEU).

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:

5. Competent Parliamentary Committee: Committee on Economic and Monetary Affairs (ECON)

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;

6. Commission's position: The Commission takes note of the amendments proposed by the European Parliament, while reserving its detailed position on these while the discussion in the Council is ongoing.

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;

The Commission will take the amendments into consideration during further Council negotiations, focusing on the objective not to unnecessarily increase compliance and administrative burdens for companies and tax administrations while respecting current Commission proposals on the table.

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;

The Commission welcomes the Parliament’s proposals to align more closely with the Pillar 2 Directive in several respects and to ensure coherence of cross-border loss-relief with Pillar 2.

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;

The Commission is supportive of the Parliament’s proposals to enhance tax revenues and investments for policy priorities, and to have a comprehensive one-stop-shop system, technical assistance, and for companies and tax administrations, introducing a European TIN, as well as clear criteria for determining beneficial ownership.

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;

The Commission also welcomes the Parliament’s proposals for fighting profit shifting and tax avoidance, and for further modernising the EU’s corporate tax environment, such as by adding a proposed concept of significant economic presence relating to the digital economy. However, the Commission wishes to note that such amendments may add administrative and compliance burdens and must therefore be carefully balanced against the need for simplification.

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.

The Commission also acknowledges Parliament’s proposals regarding a factor-based formula for allocating the BEFIT tax base, which could be a promising way forward. The Commission notes that it has carefully assessed different options to seek an appropriate formulary apportionment, as shown in the public consultation and impact assessment that accompany the proposal and decided to start with a transition period. During the transition period, the Commission would work on a study on the possible composition and weight of selected formula factors. In this regard, Parliament proposes to also include the significant economic presence as a factor in the formula, which the Commission will take into consideration.

Yours sincerely,

Johan Van Overtveldt,

Chair of the Committee on Budgets

José Manuel Fernandes,

Standing Co-rapporteur on Own Resources

Valérie Hayer,

Standing Co-rapporteur on Own Resources