The European Commission today announced that it has adopted a package of proposals aimed at reducing the costs of 𝘤𝘰𝘮𝘱𝘭𝘪𝘢𝘯𝘤𝘦 for groups of companies active at 𝘤𝘳𝘰𝘴𝘴-𝘣𝘰𝘳𝘥𝘦𝘳 by about 65 percent.
Statements by Commission Vice-President Valdis Dombrovskis and Economy Commissioner Paolo Gentiloni reveal the EU Commission’s ambition to want to introduce substantial simplification for the benefit of both companies and tax authorities through the adoption of a single set of rules for determining the tax base of those companies, belonging to the same group, that operate in more than one Member State.
Specifically, the BEFIT proposal, which is related to the OECD/G20 work on 𝘗𝘪𝘪𝘭𝘭𝘭𝘢𝘳 2 and the EU Directive on the introduction of a global minimum tax, takes the place of the previous CCCTB Directive proposal and aims at the introduction of rules, mandatory for groups of companies operating at the EU level with total annual revenues of at least €750 million and in which the parent company holds at least 75 percent of the controlling interests or profit participations, aimed at harmonizing the calculation of the tax bases of each entity participating in the group and aggregating those bases into a single group tax base. For smaller groups, however, adoption of such standards will be optional.
In the package of proposals, a proposal for a directive for EU-wide harmonization of transfer pricing rules was, in addition, also included.
Once adopted by the Council, the proposals will enter into force on July 1, 2028 (Proposed BEFIT Directive) and January 1, 2026 (Proposed Directive on 𝘵𝘳𝘢𝘯𝘴𝘧𝘦𝘳 𝘱𝘳𝘪𝘤𝘪𝘯𝘨).
For more information: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4405