The MEP, Isabel Benjumea (EPP, Spanish), presented, on Tuesday 27 June, her own-initiative report on the reform of corporate taxation rules to her colleagues on the European Parliament’s Subcommittee on Tax Matters. She stressed the importance of reducing the administrative burden and supporting the competitiveness of businesses, particularly small and medium-sized enterprises (SMEs).
This report comes ahead of the presentation of the European Commission’s ‘Business in Europe: Framework for Income Taxation’ (BEFIT) initiative, expected in September (see EUROPE 13190/30). It aims to establish a common set of rules that allow EU companies to calculate their tax base using a formula, while ensuring a more efficient allocation of profits between Member States. It must also reduce compliance costs.
With this report, the European Parliament is indicating the direction it wants to see taken. For Ms Benjumea, the war in Ukraine, the ensuing energy crisis and inflation, and the high cost of complying with the rules are creating a complicated situation for businesses, especially SMEs. “There is a competitive disadvantage compared with other regions of the world”, she said.
In her view, it is therefore essential that “support for SME competitiveness goes hand in hand with a reduction in the regulatory burden”. Her report focuses on four main measures.
Firstly, she wants to see a regulatory moratorium adopted, as “regulatory pressure leads to unsustainable costs for businesses”. “The aim is not to legislate more, but to legislate more effectively”, she said.
Secondly, she suggested that competitiveness checks be put in place to analyse the impact of these measures on businesses.
Thirdly, she proposed using tax exemptions and reductions, as well as tax incentives to support business competitiveness. “We must insist on responsibly applied incentives for research and development”, she defended.
Fourthly, she has come out in favour of a simplified tax system to reduce the administrative and bureaucratic burden. “The Commission must encourage the Member States to simplify tax refunds and litigation”, she suggested. “This reduction will strengthen the resilience of European businesses, encourage investment and create the conditions for fair and sustainable growth”, she added.
Pedro Marques (S&D, Portuguese), represented by Aurore Lalucq (French), Manon Aubry (The Left, French) and Martin Hlaváček (Renew Europe, Czech) said that tax evasion, avoidance and fraud should also be tackled.
MEPs have until Wednesday 5 July to table amendments, which will be discussed on Monday 17 July.
To read the draft report: https://aeur.eu/f/7rz (Original version in French by Anne Damiani)