Business in Europe: Framework for Income Taxation (BEFIT)

Wording as published by the EP, in English.

1. Amendment 82Rejected

   Recital 1 a (new)

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   Added: (1 a) In 1975, the Commission tabled a proposal to minimise the differences between Member States' corporate tax rates. Under the proposal, Member States could still choose their own corporate tax rate, but that rate could “not be lower than 45 % nor higher than 55 %”. Due to a lack of support from Member States, the proposal was withdrawn.

2. Amendment 83Rejected

   Recital 1 b (new)

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   Added: (1 b) In 2016, the Commission tabled an altered 'rebooted' proposal for a common corporate tax base (CCCTB). A common European corporate tax base would serve as a single rulebook on how companies should calculate their overall profit in the Union. After calculating a common tax base, a company active in more than one Member State could add up all the profits and losses of its entities in the different Member States to work out its total net profit or loss for the entire Union (consolidation). The company's taxable profits would then be allocated between the respective company entities, using an apportionment formula (formulary apportionment), with the profits being divided on the basis of three equally weighted factors (labour, tangible assets and sales). Each Member State would then tax the allocated shares of the company's profits at its own national corporate tax rate. The 2016 CCCTB proposal eventually met the same fate as its 2011 predecessor. The Council was not able to reach unanimous support and while the Council had initially paused negotiations to provide room for the OECD/G20 Inclusive Framework's reform of corporate tax rules, the 2016 CCCTB proposal was withdrawn in September 2023.

3. Amendment 84Rejected

   Recital 2

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   … rise to complexity in tax compliance and leads to unfair competition for Removed: businesses. Added: businesses, especially because MNEs could use the different tax systems in order to engage in aggressive tax planning, resulting in SMEs having to pay a higher amount of taxes proportionally to their profits. That has become more evident as globalisation and digitalisation of the economy … long procedures characterised by unpredictability and inconsistency along with high compliance costs. Added: Most importantly, it leads to tax avoidance practices by MNEs.

4. Amendment 85Rejected

   Recital 6

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   … presence in the Union provided that they have annual combined revenues of Removed: more than EUR 750 000 000 Added: EUR 40 000 000 or more, in line with the criteria to be a large group within the meaning of Directive 2013/34/EU of the European Parliament and of the Council1a based on their consolidated financial statements. In this way, the scope would … alignment with Directive (EU) 2022/2523 for a consistent approach in the Union. Added: 1a Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).

5. Amendment 86Rejected

   Recital 7 a (new)

   Tabled by Manon Aubry, Pasquale Tridico, Martin Schirdewan +1 · The Left

   Added: (7 a) The Union should actively engage in international negotiations with a view to promoting the global harmonisation of rules and the allocation of taxing rights based on a formula reflecting tangible factors such as labour, assets and sales. The ongoing negotiations within the United Nations on international tax cooperation are a unique and timely opportunity in that regard. In that context, the abstention of several Member States is regrettable and they should be strongly encouraged to participate constructively and proactively in those discussions.

6. Amendment 87Rejected

   Recital 7 b (new)

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   Added: (7 b) In order to avoid the delocalisation of profits outside the Union by MNEs, BEFIT groups should also declare their global profit at the international level. The formula used in this Directive would then also be used to compare the profits originally declared in the Union with the ones that would have been declared if the formula was applied to the global profits of the BEFIT group. If the corrected profits are higher than the declared profits, the Union will tax those corrected profits thanks to the formula included in this Directive.

7. Amendment 89Rejected

   Article 2 – paragraph 1 – point a

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   … which prepares consolidated financial statements and had annual combined revenues of EUR Removed: 750 Added: 40 000 000 or more in at least two of the last four …

8. Amendment 90Rejected

   Article 15 – paragraph 1

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   Removed: The financial accounting net income or loss of a BEFIT group member carrying out shipping activities shall be adjusted to exclude the amount of revenues, expenses and other deductible items derived from such activities covered by a tonnage tax regime. Added: deleted

9. Amendment 91Rejected

   Article 42 – paragraph 2 – point b

   Tabled by Manon Aubry, Pasquale Tridico · The Left

   Removed: (b) a negative amount, the loss shall be carried forward and shall be set off against the next positive BEFIT tax base. Added: deleted

10. Amendment 92Rejected

    Article 45

    Tabled by Manon Aubry, Pasquale Tridico · The Left

    Removed: [...] Added: deleted

11. Amendment 93Rejected

    Article 45 a (new)

    Tabled by Manon Aubry, Pasquale Tridico · The Left

    Added: Article45a Allocation rule based on tangible factors 1. As of 1 July 2027, the BEFIT tax base shall be allocated to the BEFIT group members in each tax year on the basis of the following formula, which gives equal weight to the factors of sales, labour and assets set out in Articles 45b to 45h: Share A = (SalesA / (3 * SalesGroup) + PayrollA / (6 * PayrollGroup) + Number of EmployeesA / (6 * Number of EmployeesGroup) + AssetsA/ (3* AssetsGroup) ) * Consolidated Tax Base 2. The consolidated tax base of a BEFIT group shall be shared only where it is a positive amount. 3. The calculations for sharing the consolidated tax base shall be done at the end of the tax year of the BEFIT group. 4. A period of 15 days or more in a calendar month shall be considered to be a whole month. 5. When determining the apportioned share of a BEFIT group member, equal weight shall be given to the factors of sales, labour and assets.

12. Amendment 101Rejected

    Article 47

    Tabled by Manon Aubry, Pasquale Tridico · The Left

    Removed: Article 47 Exception for shipping not covered by a tonnage tax regime, inland waterways transport and air transport 1. By way of derogation from Article 42 to 45 and without prejudice to Article 15, the revenues, expenses and other deductible items which stem from the following activities shall be excluded from the BEFIT tax base in any of the following cases: (a) the operation of ships in international traffic where the taxable result is not covered by a tonnage tax regime; (b) the operation of aircraft in international traffic; (c) the operation of boats engaged in inland waterways transport. The revenues, expenses and other deductible items as referred to in the first subparagraph shall be attributed to that BEFIT group member on a transaction-by-transaction basis and be subject to adjustments for pricing in accordance with the arm’s length principle. 2. Any participation in and by the BEFIT group member as referred to in paragraph 1 shall be taken into account for the purpose of Article 5. Added: deleted

13. Amendment 102Rejected

    Article 72 – paragraph 1 a (new)

    Tabled by Manon Aubry, Pasquale Tridico · The Left

    Added: Penalties shall be set at a minimum of 0,5 % of the turnover of the BEFIT group for any failure to file the BEFIT information return pursuant to Article 59.

14. Amendment 103Rejected

    Recital 3 a (new)

    Tabled by Sarah Knafo · ESN

    Added: (3 a) In accordance with the principles of subsidiarity and proportionality set out in Article 5 of the Treaty on European Union, direct taxation policy remains the responsibility of the Member States. This Directive shall in no way lead to binding harmonisation of national tax bases or affect the budgetary sovereignty of Member States.

15. Amendment 104Rejected

    Recital 18

    Tabled by Sarah Knafo · ESN

    … pursuant to this Directive. Such penalties should be effective, proportionate and dissuasive. Added: Member States shall remain solely competent to define the system and level of penalties applicable, in accordance with their respective legal traditions.