On Monday 17 July, the members of the European Parliament’s Subcommittee on Tax Matters (FISC) examined the amendments to the own-initiative report on the reform of company taxation rules by Isabel Benjumea (EPP, Spanish). They agree on the need to reduce the administrative burden on small and medium-sized enterprises (SMEs) in tax matters.
This report comes ahead of the presentation of the European Commission’s ‘Business in Europe: Framework for Income Taxation’ (BEFIT) initiative (see EUROPE 13210/4, 13190/30). This initiative, expected in September, will include a new formula for calculating the tax base of companies, while guaranteeing a more efficient distribution of profits between Member States. It should also reduce compliance costs.
292 amendments have been tabled, half of which concern SMEs, according to Ms Benjumea. “We have to be careful about the effect this may have on them, because European SMEs already have a lot of tax obligations to fulfil”, she warned.
However, she noted that “everyone agreed that it is necessary to overcome all the obstacles to fair company taxation”.
“The reduction in the compliance burden must be well focussed”, said Pedro Marques (S&D, Portuguese). “We have particularly address the differences between the compliance burden for SMEs and the big companies, which is quite to the disfavour of SMEs currently and at the same time of course it cannot put at stake the capacity to properly collect taxes”, he added.
“The reform will have an impact on EU businesses and Member States’ tax administrations, therefore I think we should highlight that sufficient time should be given for adaptation”, said Martin Hlaváček (Renew Europe, Czech).
For his part, Claude Gruffat (Greens/EFA, French), represented by Kira-Marie Peter-Hansen of Denmark, added an amendment on the aid needed for Europeans facing inflation.
Debates surrounding the ‘DEBRA’ (‘debt-equity bias reduction allowance’) directive, relating to a franchise for the reduction of tax incentives favouring indebtedness, are likely to resurface (see EUROPE 13133/17). With the ‘BEFIT’ presentation, the European Commission hopes to relaunch ‘DEBRA’, which has been blocked in the EU Council since December 2022 (see EUROPE 13087/25).
“If my colleagues wish to put this subject back on the table in the text we’re discussing today then I would argue that we should clearly state the costs associated with such a measure”, announced Ms Peter-Hansen.
“This proposal will not play its intended role, taking into account its complexity as well as the impact on state budgets”, emphasised Mr Hlaváček.
Discussions between the groups will begin after the summer break. Ms Benjumea expressed confidence that a compromise would be reached. The report will be put to the vote in the Committee on Economic and Monetary Affairs at the end of October.
Read the amendments: https://aeur.eu/f/853 (Original version in French by Anne Damiani)