Skip to content
REPORT (2025/2210(INI))

On the EU’s approach to corporate tax policy in a changing international environment

A-10-2026-0238

Committee on Economic and Monetary Affairs · Rapporteur: Kinga Kollár

Official HTML ↗ PDF DOCX
✦ In shortFull textProcedure & committee votes
✦ In short · AI summary of this text, generated 25 Sept 2026

Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's resolution on the EU's approach to corporate tax policy in a changing international environment sets out its position on international corporate taxation, Pillar Two implementation and the side-by-side (SbS) agreement. It calls on the Commission to analyse and report on the impact of the SbS, including potential revenue losses for member states, and to propose solutions to correct structural imbalances. It asks for simplification of EU tax rules, progress on the tax simplification package, and a re-examination of the BEFIT proposal to avoid overlap with Pillar Two. It calls for stronger measures against tax havens, full beneficial ownership transparency, automatic exchange of information and sanctions against non-cooperative jurisdictions. It supports continued international cooperation on taxation, including the UN Framework Convention process, and invites member states to present a unified position in multilateral forums.

Committee position. The committee proposes that Parliament adopt the resolution, calling for analysis of the side-by-side agreement's impact, simplification of EU tax rules, a re-examination of BEFIT, stronger action against tax havens, and continued international cooperation.

Key points

  1. Stresses that EU competitiveness requires a stable, predictable, attractive and transparent tax environment with proportionate administrative burden, while respecting member states' flexibility on domestic tax systems.
  2. Finds that divergences and fragmentation in corporate tax rules, especially on withholding taxes and loss offsets, raise complexity and costs for firms operating across borders, and that common definitions and standards could help.
  3. Welcomes OECD efforts to establish a global floor for MNE tax obligations through a minimum effective tax rate, but regrets incomplete global implementation of Pillar Two, with China and India not having implemented it.
  4. Expresses concern about the SbS agreement, saying it risks harming the level playing field, and notes that US-headquartered MNEs are technically exempted from most Pillar Two obligations while EU-headquartered MNEs are disadvantaged.
  5. Calls on the Commission to urgently analyse and report on the SbS impact, including revenue losses and the new targeted substance-based tax incentive safe harbour and blending rules, and to propose corrective solutions.
  6. Calls on the Commission to use State aid and anti-subsidy measures against anti-competitive tax advantages, and urges EU State-aid-compliant tax tools to attract high-value-added activities.
  7. Recommends making access to European funding, research and innovation programmes and public procurement conditional on a substantive tax presence and compliance with EU law.
  8. Calls for an annual Commission report on effective tax rate differences between EU and non-EU MNEs operating in the single market, with corrective measures where necessary.
  9. Notes that Pillar Two imposes new administrative burdens and one-off costs, regrets that the SbS increases complexity, and calls for simplification, safe harbours and streamlined reporting while safeguarding Pillar Two's effectiveness.
  10. Calls on member states to progress swiftly on tax simplification, ensuring burdens for large companies are not extended to SMEs, and to use the Tax Omnibus review to standardise terms and apply the 'once-only' principle.
  11. Calls on the Commission to re-examine the BEFIT proposal to tackle inconsistencies with Pillar Two, avoid an overlapping parallel tax framework, and consider a narrower step-by-step proposal; notes Council negotiations remain blocked.
  12. Calls for stronger measures against tax havens, full beneficial ownership transparency, automatic exchange of information, sanctions against non-cooperative jurisdictions, and relaunching reform of the code of conduct.

Who is affected

  • EU-headquartered multinational enterprises, which the resolution says face a competitive disadvantage under the SbS and Pillar Two burdens.
  • US-headquartered multinational enterprises, which the resolution says are exempted from most Pillar Two obligations under the SbS.
  • Small and medium-sized enterprises, which the resolution says may face competitive disadvantage and should not have large-company reporting burdens extended to them.
  • Member states, which retain competence over direct taxation and are asked to ensure full transposition of the Pillar Two Directive and coordinate in multilateral forums.
  • The Commission, which is asked to analyse the SbS impact, report annually on effective tax rates, and re-examine the BEFIT proposal.

Figures and deadlines

  • Global revenue losses from BEPS estimated at between USD 100 billion and 240 billion, about 4 to 10 % of global corporate income tax revenues.
  • Effective tax rate of multinational companies in the EU declined by 2.7 percentage points between 2014 and 2022.
  • Global minimum effective corporate tax rate of 15 % under Pillar Two.
  • Pillar Two implemented by around one third of the 148 jurisdictions participating in the OECD/G20 Inclusive Framework.
  • US NCTI effective tax rate of approximately 12.6 %.
  • Pillar Two applies to MNEs exceeding an annual revenue threshold of 750 million euros.
  • OECD peer-review process expected to start in the second half of 2026; formal stocktake and review of the Pillar Two package scheduled to conclude by 2029.
  • UN Framework Convention on International Tax Cooperation and two protocols expected to be concluded by 2027.

Legal basis: Article 4 and Articles 63 to 66, and Articles 113, 114 and 115 of the Treaty on the Functioning of the European Union.