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DRAFT REPORT (2025/2211(INI))

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

ECON-PR-785418

Committee on Economic and Monetary Affairs · Rapporteur: Ľudovít Ódor

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This draft report proposes a 28th tax regime as an optional EU-wide framework for innovative companies, start-ups and scale-ups, covering corporate, insolvency, labour and tax law to boost competitiveness. It lays down principles for taxation, including a single consolidated corporate tax base, cross-border loss relief, formulary apportionment, centralised VAT, withholding tax exemptions, employee stock option rules, reduced transfer pricing complexity, an EU-wide investor passport, and coordinated tax incentives. It calls for a layered, modular approach with corporate law in the forefront, a roadmap, and regular reviews.

Committee position. The rapporteur proposes a resolution welcoming the Commission's proposal for a 28th regime and outlining detailed principles for its tax aspects, including a consolidated tax base, loss relief, and simplified procedures.

Key points

  1. Welcomes the Commission's legislative proposal for a 28th regime for companies and reiterates it must be ambitious and comprehensive, including on taxation.
  2. Stresses the regime must cover all relevant aspects of corporate, insolvency, labour and tax law, cover the whole life cycle of companies, and be evaluated against international benchmarks.
  3. Notes the regime may take the form of enhanced cooperation, with an opt-in or opt-out structure, a sunset clause, or a combination.
  4. Calls for a layered, modular and pilot-based approach with corporate law in the forefront, and a roadmap known from the outset and adjusted periodically.
  5. Emphasises the scope should initially be limited to a restricted category of companies, such as innovative firms or cross-border growth-oriented start-ups, defined by criteria like R&D expenditure, size, workforce qualification, or intellectual property ownership.
  6. Proposes that companies opting in are bound by the rules, with automatic recognition across member states, and mandatory exit upon an initial public offering or after a specified period.
  7. Proposes a single consolidated corporate tax base, uniform method for determining taxable income, and neutrality between debt and equity financing.
  8. Proposes cross-border loss relief, automatic recognition of losses, and tax deferral as an option in the absence of a harmonised definition of losses.
  9. Proposes apportioning the consolidated tax base among member states using a pre-agreed formula based on sales, labour and tangible assets.
  10. Emphasises the need for a centralised VAT framework with a single EU VAT number and digital One-Stop Shop portal, and exemption from withholding tax for dividends, interest and royalties between participating entities.
  11. Proposes that employee stock options be taxed at disposal and treated as capital income, and calls for standardised valuation methods and safe harbour rules.
  12. Calls for an EU-wide investor passport, standardised investment instruments, and coordinated tax incentives for R&D and scale-up activities.

Who is affected

  • Innovative companies, start-ups and scale-ups that opt into the regime.
  • Member states, which must recognise the regime and may participate via enhanced cooperation.
  • Investors, who would benefit from an EU-wide investor passport and reduced cross-border uncertainty.

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