Posted on Jan 13, 2019
The European Commission proposal for the Multiannual Financial Framework 2021-2027 reveals the intention to turn member state's corporate tax revenue into an EU 'Own Resource'.
The document reveals that a commission proposal for the harmonisation of corporate tax rates across the EU, first put forward in 2016, was in fact a first step towards this end.
An Own Resource based on corporate tax would be justified insofar as multinational enterprises benefit from the freedoms of the single market. The Common Consolidated Corporate Tax Base will help Union efforts to tackle tax avoidance. Once the Common Consolidated Corporate Tax Base has been agreed in line with Commission proposals of 2016, a new Own Resource building on this base would be easy to implement.
The proposal suggests that under "the new rules" collecting contributions from member states will be straightforward, and will provide "stable and relatively large amounts of revenues to EU budget".
Skimming off 3% of corporate tax across the board could bring in an annual average of approximately €12 billion.
Hungary currently has the lowest corporate tax rate in the EU at 9%, whilst Malta has the highest at 35%.
The Commission proposal also calls for a levy on the Emissions Trading System, and a tax on member states based on the level of plastic packaging waste produced.
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