—

having regard to Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States (1) (the Interest and Royalties Directive),

—

having regard to Council Directive 2011/96/EU of 30 November 2011 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (2) (the Parent Subsidiary Directive),

—

having regard to Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (3) (the Anti-Tax Avoidance Directive I or ATAD I) and Council Directive (EU) 2017/952 of 29 May 2017 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries (4) (ATAD II),

—

having regard to Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (5) (the Directive on Administrative Cooperation in the Field of Taxation or DAC 1), Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (6) (DAC 2), Council Directive (EU) 2015/2376 of 8 December 2015 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (7) (DAC 3), Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (8) (DAC 4), Council Directive (EU) 2016/2258 of 6 December 2016 amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities (9) (DAC 5), Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (10) (DAC 6), and Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (11) (DAC 7),

—

having regard to Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union (12) (the EU Dispute Settlement Directive),

—

having regard to Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (13) (the Public Country-by-Country Reporting Directive),

—

having regard to Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union (14) (the Pillar Two Directive),

—

having regard to the Commission proposals awaiting adoption, in particular on a Common Corporate Tax Base (COM(2016)0685), a Common Consolidated Corporate Tax Base (COM(2016)0683) and a digital taxation package (COM(2018)0147) and COM(2018)0148), as well as to Parliament’s positions on these proposals,

—

having regard to the Commission communication of 15 January 2019 entitled ‘Towards a more efficient and democratic decision making in EU tax policy’  (15),

—

having regard to the Commission communication of 15 July 2020 entitled ‘An action plan for fair and simple taxation supporting the recovery strategy’ (COM(2020)0312),

—

having regard to the Commission communication of 18 May 2021 entitled ‘Business Taxation for the 21st Century’ (COM(2021)0251),

—

having regard to the Commission communication of 22 December 2021 entitled ‘The next generation of own resources for the EU Budget’  (16),

—

having regard to the Commission proposal of 22 December 2021 for a Council directive on ensuring a global minimum level of taxation for multinational groups in the Union (COM(2021)0823), as well as to Parliament’s position on this proposal (17),

—

having regard to the Commission communication of 20 June 2023 entitled ‘An adjusted package for the next generation of own resources’  (18),

—

having regard to the conclusions of the Economic and Financial Affairs Council of 6 December 2022,

—

having regard to the Commission study of January 2022 entitled ‘Tax compliance costs for SMEs – An update and a complement: final report’,

—

having regard to the report on the final outcome of the Conference on the Future of Europe, and to the European Parliament resolution of 4 May 2022 on the follow-up to the Conference on the Future of Europe (19),

—

having regard to the Commission proposal of 11 May 2022 for a Council directive on laying down rules on a debt-equity bias reduction allowance and on limiting the deductibility of interest for corporate income tax purposes (COM(2022)0216),

—

having regard to Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices,

—

having regard to the Commission’s call for evidence for an impact assessment of 13 October 2022 on the proposal for a Council directive on Business in Europe: Framework for Income Taxation (BEFIT),

—

having regard to the speech by Commission President Ursula von der Leyen at the European Parliament plenary on 19 October 2022 on the preparations for the European Council meeting of 20-21 October 2022,

—

having regard to the state of the union speech by Commission President Ursula von der Leyen at the European Parliament plenary in September 2022,

—

having regard to the 2023 Commission Country reports in its European Semester,

—

having regard to the Commission communication of 16 March 2023 entitled ‘Long-term competitiveness of the EU: looking beyond 2030’ (COM(2023)0168),

—

having regard to the Commission’s annual report on taxation 2023 (20),

—

having regard to the European Council conclusions of 23 March 2023,

—

having regard to its resolution of 7 October 2021 on reforming the EU policy on harmful tax practices (21) (including the reform of the Code of Conduct Group),

—

having regard to its resolution of 15 February 2022 on the impact of national tax reforms on the EU economy (22),

—

having regard to its resolution of 10 March 2022 with recommendations to the Commission on fair and simple taxation supporting the recovery strategy (EP follow-up to the July Commission’s Action Plan and its 25 initiatives in the area of VAT, business and individual taxation) (23),

—

having regard to its resolution of 10 March 2022 on a European Withholding Tax framework (24),

—

having regard to its resolution of 4 October 2022 entitled ‘Impact of new technologies on taxation: crypto and blockchain’  (25),

—

having regard to the Organisation for Economic Co-operation and Development (OECD) Action Plan of 19 July 2013 on Base Erosion and Profit Shifting (BEPS),

—

having regard to the Commission studies on ‘aggressive tax planning indicators’  (26),

—

having regard to the OECD/G20 BEPS final reports of October 2015,

—

having regard to the statement of the OECD/G20 Inclusive Framework on BEPS of 8 October 2021 entitled ‘Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy’, which has been joined and agreed to by 138 out of 141 members as of 16 December 2022,

—

having regard to the reports on the Pillar One and Pillar Two Blueprints adopted by the OECD/G20 Inclusive Framework on 14 October 2020, and to the results of the OECD economic analysis and impact assessment of 12 October 2020 entitled ‘Tax Challenges Arising from Digitalisation – Economic Impact Assessment’,

—

having regard to the Pillar Two model rules of the OECD/G20 Inclusive Framework on BEPS of 20 December 2021 for domestic implementation of a 15 % global minimum tax,

—

having regard to the statement of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) entitled ‘Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy’, which had been joined and agreed to by 137 out of 141 members as of 4 November 2021,

—

having regard to the Commission Proposal of 19 June 2023 for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes (COM(2023)0324),

—

having regard to United States Public Law 117-169 of 16 August 2022, known as the Inflation Reduction Act,

—

having regard to Rule 54 of its Rules of Procedure,

—

having regard to the letter from the Committee on Budgets,

—

having regard to the report of the Committee on Economic and Monetary Affairs (A9-0359/2023),

A.

whereas Member States are free to decide on their own economic policies, in particular their own tax policies, as guaranteed by the EU Treaties, especially the rule of unanimity enshrined therein; whereas a well-functioning tax system is in the interest of Member States in order to ensure proper tax collection; whereas, although tax policy largely remains a responsibility of the Member States, the single market requires coordination and cooperation among the Member States and at EU level in setting tax policy in order to further single market integration, to avoid economic distortions and to avoid harmful tax competition;

B.

whereas tax policy is a national competence under the treaties and tax sovereignty is a fundamental principle of the EU legal order; whereas unanimity, as it appears in the Treaties, must be counterbalanced by a very high level of responsibility from Member States and must be in line with the principle of sincere cooperation based on Article 4(3) of the Treaty on European Union; whereas this primary law framework allows a high level of legislative coordination and administrative cooperation among EU Member States; whereas such coordination and cooperation is required in order to preserve the integrity of the Single Market and fair and transparent tax competition;

C.

whereas the notion of a fair and efficient tax system does not necessarily entail a higher overall level of taxation;

D.

whereas European citizens are struggling to make ends meet and, in addition to low-income households, the middle class is increasingly being affected, and a number of companies are facing various challenges; whereas other companies, particularly in the energy sector, have made windfall profits;

E.

whereas as of the 4 November 2021, 137 out of 141 members of the OECD/G20 Inclusive Framework on BEPS, including all EU Member States, agreed on the reform of the international tax system through a two-pillar solution to address the challenges stemming from the digitalisation of the economy, including placing multilaterally agreed limitations on profit shifting;

F.

whereas SMEs currently account for almost all European Union (EU-27+1) non-financial business sector enterprises (99,8 %), two-thirds of total EU-28 employment (66,6 %) and slightly less than three-fifths (56,8 %) of the value added generated by the nonfinancial business sector according to the Commission’s report on ‘Tax compliance costs for SMEs: An update and a complement of January 2022’;

G.

whereas the BEPS action plan managed to establish a consensus within the OECD/G20 Inclusive Framework on BEPS bringing together over 139 countries and jurisdictions on many issues regarding the fight against tax avoidance and aggressive tax planning;

H.

whereas aggressive tax planning can have an impact on taxpayers being in line with tax compliance rules and on the competitiveness of companies and the stability of tax revenue; whereas aggressive tax planning and harmful tax competition can have a negative impact on the functioning of the single market;

I.

whereas the EU led by example in transposing international agreements into directives improving coordination and the EU’s fight against tax fraud, tax avoidance and aggressive tax planning; whereas Member States showed some degree of diversity in addressing the OECD BEPS action plan;

J.

whereas the Code of Conduct Group on Business Taxation has continued their task to identify and curb Member States’ harmful tax measures; whereas Finance ministers agreed on 8 November 2022 to strengthen the code of conduct; whereas some companies seem to adapt to new tax rules and may apply aggressive tax planning schemes; whereas the Final BEPS package for reform of the international tax system to tackle tax avoidance was approved by OECD/G20 participating countries in 2015;

K.

whereas the average headline corporate income tax rate in EU countries has changed from 35 % in 1995 to 21,2 % in 2023;

L.

whereas as of June 2023, 143 jurisdictions, including all EU Member States, had agreed on the reform of the international tax system through a two-pillar solution;

M.

whereas the legally binding interinstitutional agreement of 16 December 2020 provides for the implementation of a roadmap of new resources; whereas the new own resources proposed by the Commission in December 2021 are intended to cover part of the repayment of Next Generation EU; whereas, in June 2023, the Commission proposed an own resource linked to the corporate sector;

N.

whereas tax policy fragmentation, complexity and inadequate digitalisation contributes to creating various obstacles for companies, including SMEs workers, self-employed and citizens in the Single Market legal uncertainty, red-tape, risk of double taxation, difficulties claiming tax refunds; whereas those obstacles discourage cross-border economic activity in the Single Market; whereas overcoming these obstacles requires multilateral cooperation between Member States and the urgent implementation by Member States of digital solutions that simplify and reduce the cost of tax compliance for businesses; whereas policy fragmentation also creates risks for tax authorities such as double non-taxation and arbitrage possibilities (tax planning); whereas some Member States have developed schemes that would cause lower taxation than the national nominal rate, and may put SMEs at a competitive disadvantage;

O.

whereas Member States continue to lose tax revenue due to harmful tax practices, and estimates of revenue lost as a result of harmful tax practices range from EUR 36-37 billion to EUR 160-190 billion per year; whereas policy fragmentation might increase the cost of enforcement for tax authorities;

P.

whereas the solidarity contribution applied to the windfall profits of some companies from the energy sector;

Q.

whereas within the EU’s Social Market Economy adequate tax levels as well as simple and clear tax laws should not distort economic actors’ decision making; whereas sound tax policies should support the creation of jobs and economic growth and improve the competitiveness of the EU and its Member States;

R.

whereas such tax policy fragmentation must be mitigated with increased coordination and cooperation and with a clear commitment of Member States with the swift and competent transposition of directives in the area of taxation;

S.

whereas most corporate taxation systems in the EU allow for generous tax deductions on interest payments (27); whereas equity financing costs, which include dividend payments, cannot be deducted in a similar manner; whereas there is a structural disadvantage facing companies that rely on equity financing, in particular if they are young and small companies with poor access to credit; whereas this bias creates problematic incentives towards over-indebtedness; whereas corporate equity allowances can have an impact on Member States’ tax revenue and must be carefully designed;

T.

whereas private companies, including SMEs, play a fundamental role in society by being the main generators of employment; whereas through their business activity, these organisations create job opportunities for millions of people, which in turn drives the economic and social development of the communities in which they operate; whereas by fostering competition and innovation, private enterprises promote efficiency in the allocation of resources, resulting in increased productivity and economic growth; whereas, private business activity also generates tax revenues for the state, which can be used to finance essential public services; whereas private enterprises, as the main generators of employment, play an essential role in the economic and social development of societies, promoting progress and improving people’s quality of life;

U.

whereas the Commission issued a proposal for a single set of tax rules for doing business in Europe, the Business in Europe: Framework for Income Taxation (BEFIT);

V.

whereas the Commission’s legislative impetus on taxation should pursue clear priorities linked with fighting tax fraud and tax avoidance, promoting administrative simplification, bureaucracy reduction and compliance costs mitigation, particularly as regards SMEs;