Business in Europe: Framework for Income Taxation (BEFIT)

Key points

The EESC:

• praises the Commission's continuous efforts to develop a common corporate tax framework to support the consolidation of the internal market;
• supports the Commission's decision to propose BEFIT through an EU directive, as the current variety of different national rules results in fragmentation and discrepancies, hindering cross-border activities on the internal market due to the high costs that companies incur to comply with multiple legal frameworks;
• notes that, pursuant to Article 48(2) of the BEFIT proposal, Member States will be entitled to add tax base increases, tax deductions or tax incentives to their allocated parts. While the EESC acknowledges the value of allowing Member States room for manoeuvre, such flexibility could come at odds with the Commission objective of reducing the compliance costs weighing on companies;
• concurs with the Commission that the agreement on Pillar Two could contribute towards achieving a shared EU legal framework on corporate taxation. The EESC believes that, in order to actually simplify and reduce costs, BEFIT should be aligned with the OECD's Pillar Two rules;
• recommends that any data processing related to the BEFIT framework be carried out in accordance with the GDPR principle of "data minimisation", limiting the collection of personal information to what is directly relevant and necessary to accomplish the specific purposes of the BEFIT proposal, and only retaining the data for the minimum period necessary to fulfil such purposes;
• underlines the importance of carefully assessing compliance costs and administrative burdens on companies interested in the BEFIT proposal, so that they understand the actual benefits of the new framework for businesses across Europe.