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REPORT (2025/2211(INI))

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

A-10-2026-0167

Committee on Economic and Monetary Affairs · Rapporteur: Ľudovít Ódor

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This resolution addresses the feasibility of a 28th tax regime to support EU competitiveness. It welcomes the Commission's 'EU Inc.' proposal and outlines principles for a tax module, covering corporate income, VAT, withholding tax, employee taxation, transfer pricing, access to capital, and tax incentives. The resolution calls for a modular, optional regime that reduces compliance costs and fragmentation, respects Member State tax competences, and includes safeguards against abuse. It proposes specific measures such as a single consolidated corporate tax base, centralized VAT, and simplified withholding procedures. It emphasizes that the tax module should not create unfair advantages, must comply with State aid rules, and should be reviewed every four years. The resolution also suggests considering qualified majority voting for certain tax aspects.

Committee position. The Committee on Economic and Monetary Affairs proposes a resolution outlining principles for a 28th tax regime, welcoming the Commission's proposal and recommending specific tax measures, while respecting Member State competences.

Key points

  1. Welcomes the Commission's proposal for a 28th regime ('EU Inc.') and stresses it should not replace further efforts to reduce regulatory fragmentation.
  2. Calls for an ambitious 28th regime that respects the Treaties and enables SMEs, small mid-caps, and innovative companies to scale up seamlessly across the single market.
  3. Underlines that the regime must not circumvent worker protections or weaken existing levels of protection, and should support innovation and tax fairness.
  4. Proposes a modular approach with a tax module added to the corporate legal framework, covering the entire life cycle of companies and evaluated against international benchmarks.
  5. Suggests considering an opt-in structure or enhanced cooperation for the tax module, and notes that qualified majority voting is necessary in certain tax policy aspects to prevent unanimity from limiting harmonisation.
  6. Insists the regime must reduce compliance complexity and not create a parallel rulebook, with the primary goal of simplification and competitiveness.
  7. Emphasizes that the tax module should not create unfair tax advantages but reduce complexity, and should be limited initially to a subset of companies like cross-border growth-oriented start-ups and scale-ups.
  8. Requires that tax incentives be compatible with State aid rules and avoid harmful tax competition.
  9. States that opting into the regime is voluntary, but exit is mandatory upon achieving criteria like an initial public offering, with conditions for voluntary exit to prevent regulatory arbitrage.
  10. Calls for a single digital registration at the One-Stop Shop, a single tax number, and standardized documentation, with an English-first principle for communication.
  11. Proposes a single consolidated corporate tax base for participating companies, with allocation among Member States using a formula reflecting real economic activity, and stresses that tax rates remain a Member State competence.
  12. Calls for a centralized VAT framework with a single EU VAT number and digital One-Stop Shop portal, and simplified withholding tax procedures for dividends, interest, and royalties.

Who is affected

  • SMEs, start-ups, scale-ups, and innovative companies that may opt into the 28th regime and its tax module.
  • Member States, which retain competence over tax rates but may need to recognize the regime and adapt procedures.
  • Employees and key personnel of participating companies, affected by stock option taxation and social security rules.
  • Investors, who may benefit from harmonized capital gains treatment and simplified cross-border investment.

Figures and deadlines

  • Estimated administrative burden reduction of EUR 328 million to 440 million over 10 years.
  • As of 2025, Europe had 331 unicorns compared to 1,963 in the United States.
  • Between 2008 and 2021, close to 30% of European unicorns relocated their headquarters outside the EU.
  • Review cycle should occur every four years.

Legal basis: 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