The European Commission is preparing to unveil a proposal for a new bloc-wide tax targeting large companies with annual net turnovers exceeding €50 million, according to reporting by the Financial Times.
The measure forms part of broader efforts to diversify and bolster revenue streams for the European Union’s common budget amid growing fiscal pressures.
The draft proposal, which has yet to be officially confirmed by the Commission, outlines a tiered or “bracket” system in which higher-revenue corporations would pay proportionally more. If adopted, the levy would apply to all qualifying firms operating within the EU, regardless of their country of origin or where they are headquartered.
The plan marks a shift from earlier initiatives that sought to introduce a digital services tax aimed primarily at large US-based technology firms such as Apple and Meta. Those sector-specific proposals were shelved following protracted resistance, particularly from Washington. Under the revised framework, however, digital giants would still be subject to the broader corporate levy.
A spokesperson for the Commission declined to comment on the leaked proposal, stating only that details remain under discussion and are subject to change. As the draft measure would require unanimous approval from all 27 EU member states, the legislative process is expected to be protracted and politically sensitive.
The move comes as the European Union anticipates a possible formal communication from US President Donald Trump announcing new tariffs on EU goods. President Trump has stepped up trade actions in recent weeks and has repeatedly criticised the EU’s regulatory approach to technology firms, which he claims unfairly targets American businesses.
The introduction of a new corporate tax could further strain transatlantic trade relations. While the proposed measure does not single out US companies, the shift away from the previously floated digital services tax may be interpreted as a partial concession. Nonetheless, the inclusion of high-revenue firms such as those in the technology sector means they will remain affected by EU tax policy developments.
In addition to the corporate levy, the Financial Times report suggests that the Commission may also consider supplementary environmental and health-related charges. Among the possibilities mentioned are taxes on non-recycled electronic waste and tobacco products. Such measures would align with broader EU objectives under the European Green Deal and public health initiatives, while also contributing to budgetary needs.
The rationale behind the proposed revenue mechanisms lies in growing demands on the EU budget, including the financing of common projects under the bloc’s NextGenerationEU recovery plan, climate transition initiatives, and increased support for external border management and defence cooperation.
The €50 million threshold is expected to exempt the majority of small and medium-sized enterprises (SMEs), ensuring that the burden falls primarily on multinational firms and large domestic operators. However, business groups are likely to scrutinise the final design of the measure closely, particularly with respect to compliance costs and competitiveness.
Observers note that unanimity among EU member states on tax policy is often difficult to secure. Previous attempts to introduce bloc-wide corporate or digital levies have been blocked by individual member states, notably Ireland and some Nordic countries, citing concerns over national tax sovereignty and economic impact.
Should consensus be reached, the new levy would represent a significant step in the EU’s ongoing efforts to establish independent funding mechanisms and reduce reliance on contributions from national governments. It would also signal a renewed willingness to pursue tax harmonisation measures, following years of limited progress in this area.
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