Skip to content
DRAFT REPORT (COM(2023)0532 – C90341/2023 – 2023/0321(CNS))

On the proposal for a Council directive on Business in Europe: Framework for Income Taxation (BEFIT)

ECON-PR-756215

Committee on Economic and Monetary Affairs · Rapporteur: Evelyn Regner

Official HTML ↗ PDF DOCX
✦ In shortFull text
✦ In short · AI summary of this text, generated 4 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.

The draft report approves the Commission proposal for a Council directive on Business in Europe: Framework for Income Taxation (BEFIT) as amended, introducing a common corporate tax base and allocation rules for large groups in the EU. It lowers the revenue threshold for mandatory application after a transition period, adds rules on interest, royalties, controlled foreign companies, depreciation, and a permanent formulary apportionment based on sales, labour, and assets. It also tightens penalties, requires secure information exchange, and asks the Commission to propose a common European taxpayer identification number by 2026.

Committee position. The rapporteur proposes to approve the Commission proposal as amended, with changes to lower thresholds, add anti-abuse rules, and introduce a permanent formulary apportionment.

Key points

  1. Approves the Commission proposal as amended and calls on the Commission to alter its proposal accordingly.
  2. Mandatory application for groups with annual combined revenues of EUR 750 000 000 or more during a transition period from 1 July 2028 to 30 June 2035, and EUR 40 000 000 or more from 1 July 2035.
  3. Excludes groups with ultimate parent outside the Union if combined revenues in the Union do not exceed 3% of total revenues or EUR 40 million.
  4. Introduces an interest limitation rule: exceeding borrowing costs deductible up to 75% in the tax period, but limited to 20% of EBITDA.
  5. Adds a royalties limitation rule: royalty costs included if recipient's income is taxed below 9% effective rate.
  6. Adds a controlled foreign company rule including non-distributed income from financial assets, royalties, dividends, and other categories, with exceptions for substantive economic activity.
  7. Sets depreciation periods: buildings 40 years (industrial 25), other tangible assets at least 10 years, intangibles 15 years if period cannot be determined.
  8. From 1 July 2035, allocates the BEFIT tax base by formula with equal weight to sales, labour, and assets.
  9. Penalties for failure to file or intentional misreporting set at a minimum of 0.1% of the BEFIT group's turnover.
  10. Calls on the Commission to submit a legislative proposal for a harmonised common European taxpayer identification number by 31 December 2026.

Who is affected

  • Large multinational and domestic groups with annual revenues of EUR 750 million or more, and from 2035, EUR 40 million or more.
  • Groups with an ultimate parent outside the Union but with significant EU presence.
  • Member States, which must implement the directive and adjust their national tax rules.
  • BEFIT group members, who must comply with new rules on interest, royalties, and controlled foreign companies.

Figures and deadlines

  • EUR 750 000 000 annual combined revenues threshold during transition period (1 July 2028 to 30 June 2035).
  • EUR 40 000 000 annual combined revenues threshold from 1 July 2035.
  • 3% of total revenues or EUR 40 million for exclusion of third-country parent groups.
  • 75% deductible limit for exceeding borrowing costs; 20% of EBITDA limit.
  • 9% effective tax rate threshold for royalties limitation.
  • Depreciation periods: 40 years for buildings, 25 for industrial, at least 10 for other tangible, 15 for intangibles.
  • 0.1% of turnover as minimum penalty for filing failures.
  • 31 December 2026 deadline for Commission proposal on taxpayer ID.

Legal basis: Article 115 of the Treaty on the Functioning of the European Union