(1)

Within the Union there is currently no common approach to the computation of the taxable base for businesses. Therefore, Union businesses are obliged to comply with a different corporate tax system in each Member State in which they operate.

(1)

Within the Union there is currently no common approach to the computation of the taxable base for businesses. Therefore, Union businesses are obliged to comply with a different corporate tax system in each Member State in which they operate. For example, in 2023, according to the 2024 Annual Report on Taxation, statutory corporate tax rates varied between Member States from 10 % to 31,5 % (and from 9 % to 29 %, taking into account the tax support schemes put in place by governments).

(2)

The existence of 27 different corporate income tax systems in the Union gives rise to complexity in tax compliance and leads to unfair competition for businesses. That has become more evident as globalisation and digitalisation of the economy have significantly altered the perception of land borders and business models. As governments have tried to adapt to that new reality, a fragmented response among Member States has led to further distortions in the internal market. The various legal frameworks inevitably lead to different tax administration practices across the Member States as well. This often entails long procedures characterised by unpredictability and inconsistency along with high compliance costs.

(2)

The existence of 27 different corporate income tax systems in the Union gives rise to complexity in tax compliance and leads to unfair competition for businesses , and can lead to double taxation, tax avoidance and double non-taxation . According to the 2024 Annual Report on Taxation, revenue losses due to corporate profit shifting were estimated at 20 % of all corporate tax revenues collected in 2022 in the Union, which would amount to around EUR 100 billion in nominal value. Those phenomena have become more evident as globalisation and digitalisation of the economy have significantly altered the perception of land borders and business models. As governments have tried to adapt to that new reality, a fragmented response among Member States has led to further distortions in the internal market. The various legal frameworks inevitably lead to different tax administration practices across the Member States as well. This often entails long procedures characterised by unpredictability and inconsistency along with high compliance costs , which can impact cross-border investments . Such complexity can hinder businesses’ expansion in the internal market, with further negative impacts on innovation, competitiveness and jobs. Therefore, a common approach is necessary, not only to ensure fair and effective taxation, but also to strengthen the integrity and competitiveness of the companies that are active on the internal market.

(3)

Albeit different in their design, the fundamental features of corporate income tax systems are similar as they lay down rules aiming towards the same objective, i.e., to arrive at a taxable base for businesses. In this vein, it would be important for businesses which operate on the internal market that Member States introduce a common legal framework to harmonise the fundamental features of corporate income tax systems with a view to simplifying tax rules and ensuring a fair competition.

(3)

Albeit different in their design, the fundamental features of corporate income tax systems are similar as they lay down rules aiming towards the same objective, i.e., to arrive at a taxable base for businesses. In this vein, to support the proper functioning of the internal market, the corporate tax environment in the Union should be shaped according to the principle that companies pay their fair share of tax in the jurisdiction(s) where their profits are generated. Therefore, it would be important for businesses which operate on the internal market that Member States introduce a common legal framework to harmonise the fundamental features of corporate income tax systems with a view to simplifying tax rules , reducing administrative burden, ensuring a fair competition , enhancing legal certainty for companies operating across borders, and fighting tax avoidance . The scope of such harmonisation should be strictly limited to the criteria and entities referred to in this Directive, while the tax rate and enforcement policies remain with Member States, within the framework of Council Directive (EU) 2022/2523 (1a).

(3a)

Harmonising the corporate tax base through a common set of rules improves transparency, thereby fostering a fairer and healthier tax environment within the Union, which is underpinned in particular by the entry into force of Directive (EU) 2022/2523 on a global minimum level of taxation, and contributes to strengthening the Union’s overall competitiveness as well as the Union's commitment to internationally agreed standards.

(4a)

To ensure legal certainty and avoid excessive administrative burdens on multinational enterprise groups, this Directive should aim for coherence with international tax developments, in particular those pursued by the OECD/G20 Inclusive Framework, including Pillar One and Pillar Two, while also taking into account the positions adopted by key international partners and Member States, including decisions to uphold or exempt themselves from agreed commitments. The Union should in any case retain sufficient flexibility to determine its own allocation mechanism, where necessary, in order to reduce compliance burdens and mitigate the risk of double or multiple taxation.

(4b)

The Commission and the Member States should ensure the coherence and alignment of this Directive with the OECD/G20 Model Rules and with Directive (EU) 2022/2523. Wherever possible, the Commission and Member States should interpret concepts in this Directive in light of the principles and rules set out in Directive (EU) 2022/2523.

(5)

The environment for doing business in the internal market should be made more attractive with the aim to stimulate growth and investment in the Union. For this purpose, the enactment of a common framework of corporate tax rules should be prioritised, in order to make it easier for businesses to comply with such rules when they operate across borders and also to encourage those who wish to further expand abroad to do so. A single set of corporate tax rules for international activity is expected to result in enhanced tax certainty and less tax disputes, as it would tackle distortions and decrease the number of cases of double and over-taxation. Furthermore, as tax revenue sustainability is key to Member States’ budgets, including to invest in infrastructure, research and development and to deliver public services, it would be critical to ensure for the future that the allocation of revenues is performed in accordance with a tool based on solid parameters that cannot be abused.

(5)

The environment for doing business in the internal market should be made more attractive with the aim to stimulate growth and investment in the Union. For this purpose, the enactment of a common framework of corporate tax rules should be prioritised, in order to make it easier for businesses to comply with such rules when they operate across borders and also to encourage those who wish to further expand abroad to do so and encourage entrepreneurship in the internal market . A single set of corporate tax rules for international activity is expected to result in enhanced tax certainty and less tax disputes, as it would tackle distortions and decrease the number of cases of double taxation and non-taxation . This further implies less opportunities to abuse some specific national tax provisions in a pan-European context. Furthermore, as tax revenue sustainability is key to Member States’ budgets, including to invest in infrastructure, research and development, security and defence, and the green and social transitions and to deliver public services, especially for the most vulnerable households, it is essential to design profit determination rules in the Union that will not result in lower revenues for Member States. In addition, it would be critical to ensure for the future that the allocation of revenues is performed in accordance with a tool based on solid parameters that cannot be abused.

(7)

Although the threshold would be determined on the basis of the combined revenues of the group on a global basis, the remit of the provisions should be limited to members of the group operating on the internal market as Union law only applies within the Union and does not bind non-Member States. Only the Union sub-set of such a group should therefore be captured. This would include companies which are resident for tax purposes in a Member State and their permanent establishments operating in a Member State as well as the permanent establishments in the Union of third country companies of the same group. Considering that the concept of a permanent establishment is dealt with within bilateral tax treaties and national law and although the definition features some common principles, there is still a degree of divergence worldwide. Consequently, it would be a pragmatic approach to rely on the existing double taxation treaties and national rules of the Member States, rather than attempt full harmonisation through secondary Union law.

(7)

Although the threshold would be determined on the basis of the combined revenues of the group on a global basis, the remit of the provisions should be limited to members of the group operating on the internal market as Union law only applies within the Union and does not bind non-Member States. Only the Union sub-set of such a group should therefore be captured. This would include companies which are resident for tax purposes in a Member State and their permanent establishments , including any significant economic presence, operating in a Member State as well as the permanent establishments in the Union of third country companies of the same group.

(7a)

The Union should lead and actively participate in international discussions on making international corporate taxation fit for the future, including by promoting a form of harmonisation of rules and an allocation of the taxable base for large multinationals.

(8a)

This Directive should lay down rules extending the concept of a permanent establishment so as to include a significant economic presence through which a business is wholly or partly carried on. The underlying objective is to improve the resilience of the internal market as a whole in order to address the challenges of taxation of the digital economy. The increased importance of services, accelerated by the digitalisation of the economy, has led to recent proposals, as embedded in the OECD/G20 Pillar One proposal, to define significant economic presence as a taxable nexus based on a purely quantitative threshold of sales in any given country in order to capture all sectors and ensure simplicity. That objective cannot be sufficiently achieved by the Member States acting individually, because digital businesses are able to operate cross-border without having any physical presence in a jurisdiction and rules are therefore needed to ensure that digital businesses pay taxes in the jurisdictions where they make profits, whether by providing services or selling products (‘sales’).

(8b)

In order to provide for a robust definition of a taxable nexus of a business in a Member State, irrespective of whether the business is digital, it is necessary that such a definition is based on the revenues from any sales, including from the supplied digital services. The definition included in this Directive is identical to the definition agreed upon in the framework of the OECD/G20 Pillar One proposal, in order to ensure coherence between this Directive and that international framework. The Union should lead by example in the international tax reform discourse, in order to provide certainty to taxpayers. Furthermore, in order to ensure consistency, the Commission may issue recommendations to support adaptations to the double tax conventions of Member States with non-Union jurisdictions, so as to ensure that the concept of a permanent establishment, including a significant economic presence, and the related profit attribution rules are applied in a manner consistent with internationally agreed standards.

(9)

The objective of simplifying the current rules underscores the envisaged initiative. Therefore, the rules on the computation of the tax base should be built by applying a limited series of tax adjustments to the financial statements of each group member. These limited adjustments would represent common adjustments that are necessary to convert the financial accounting statements into a tax base. Considering the need for alignment with Directive (EU) 2022/2523, the adjustments should resonate with that framework, which should also facilitate implementation for Member States and businesses that would already be familiar with the general principles.

(9)

The objective of simplifying the current rules underscores the envisaged initiative , improving the efficiency and competitiveness of the internal market . Therefore, the rules on the computation of the tax base should be built by applying a limited series of tax adjustments to the financial statements of each group member. These limited adjustments would represent common adjustments that are necessary to convert the financial accounting statements into a tax base. Considering the need for alignment with Directive (EU) 2022/2523, the adjustments should resonate with that framework, which should also facilitate implementation for Member States and businesses that would already be familiar with the general principles. In that framework, the payment of top-up tax due in accordance with Directive (EU) 2022/2523 or in application of a qualified domestic top-up tax as referred to in that Directive, or any other alternative minimum tax recognised in an international forum such as the OECD, should be taken into consideration.

(10)

Given that, with the aim to bring simplification, the financial accounts will be used as a starting point for computing the tax base of each group member, it is necessary to draft tax rules in such a way that they stay as close as possible to financial accounting. In the cases where this is possible, the financial accounting treatment of an asset or liability would not change for the purpose of taxation and consequently, no adjustments would be required. Accordingly, it is also necessary that in line with the rationale of taxation, other elements of the tax base be treated for tax purposes in a different way compared to how they are qualified under financial accounting.

(10)

Given that, with the aim to bring simplification, the financial accounts will be used as a starting point for computing the tax base of each group member, it is necessary to draft tax rules in such a way that they stay as close as possible to financial accounting. In the cases where this is possible, the financial accounting treatment of an asset or liability would not change for the purpose of taxation and consequently, no adjustments would be required. Accordingly, it is also necessary that in line with the rationale of taxation, other elements of the tax base be treated for tax purposes in a different way compared to how they are qualified under financial accounting. In order to ensure consistency with international tax practices such as those under the Pillar Two framework, this Directive should allow greater flexibility in the choice of financial accounting standards used to determine the preliminary tax result.

(10a)

In order to achieve the objective of a simplified tax framework and in order for this Directive to adequately complement Council Directive (EU).../... (1a)  (+), the rules laid down in this Directive on the deductibility of interest should align with the ones provided for in Directive (EU).../... (++), where applicable.

(10b)

To guarantee a minimal level of taxation of royalties, a royalties limitation rule for BEFIT group members should be introduced in accordance with the Subject to Tax Rule (1a) as proposed by the OECD/G20 Inclusive Framework in Pillar Two.

(10c)

A fairer taxation of passive income also requires robust Controlled Foreign Company (CFC) rules for BEFIT group members in order to make them more resilient against profit shifting.

(11a)

In order to encourage investment, achieve a sustainable transition and enhance the Union's ability to prevent and respond to emerging threats and crises, Member States should adopt a targeted accelerated depreciation regime to incentivise companies to make the necessary investments to deliver on the twin transition and foster their resilience. That temporary regime should stimulate sustainable economic growth, create jobs, enhance the Union’s security, including in the digital and energy sectors, and foster innovation in sustainable technologies. To operationalise those incentives and ensure a uniform approach across the internal market, the Commission should be mandated to adopt implementing acts.

(12)

To achieve the key objective of creating a simplified corporate tax framework, the preliminary tax results for each group member should be aggregated into one single common tax base, in order to subsequently allocate this base to eligible group members. The tax adjustments to the financial statements would produce preliminary tax results for each group member. These results would then be aggregated, which would allow for cross-border loss relief between BEFIT group members, and subsequently, the aggregated tax base would be allocated to group members based on a transition allocation rule; this would pave the way towards a permanent mechanism. That permanent mechanism could be based on a formulary apportionment and would render the need for intra-BEFIT group transactions to be consistent with the arm’s length principle redundant. It would have the advantage of using more recent country-by-country reporting (‘CbCR’) data and the information gathered during the transition period. This will also allow for a more thorough assessment of the impact that the implementation of the two-pillar approach is expected to have on national tax bases and the BEFIT group tax bases. In this way, it would still become possible to materialise the key objective of tax neutrality in the internal market, which would reduce instances of double and over- taxation and enhance tax certainty with the aim of reducing the number of tax disputes.

(12)

To achieve the key objective of creating a simplified corporate tax framework, the preliminary tax results for each group member should be aggregated into one single common tax base, in order to subsequently allocate this base to eligible group members. Such a framework should be simple for businesses and should avoid imposing any new burden on them . The tax adjustments to the financial statements would produce preliminary tax results for each group member. These results would then be aggregated, which would allow for a capped cross-border loss relief between BEFIT group members, and subsequently, the aggregated tax base would be allocated to group members based on a transition allocation rule; this would pave the way towards a permanent mechanism. The permanent mechanism should be based on a formulary apportionment, including, but not limited to, four sets of tangible factors: labour, assets, sales and digital presence. It would render the need for intra-BEFIT group transactions to be consistent with the arm’s length principle redundant. It would have the advantage of using more recent country-by-country reporting (‘CbCR’) data and the information gathered during the transition period. This will also allow for a more thorough assessment of the impact that the implementation of the two-pillar approach is expected to have on national tax bases and the BEFIT group tax bases , and therefore, reduce tax compliance costs for companies. In this way, it would still become possible to materialise the key objective of tax neutrality in the internal market, which would reduce instances of double taxation and double non- taxation and enhance tax certainty with the aim of reducing the number of tax disputes. In light of evolving international tax developments and the uncertain implementation of Pillar One by key jurisdictions, it is essential that the Union preserves the flexibility in its development of an autonomous, fair, and economically balanced allocation mechanism.

(14)

To provide space for growth and investment, Member States would also be allowed to individually apply additional post-allocation adjustments (e.g. tax treatment of pension contributions) in areas not covered by the common framework. Member States would also be free to further adjust their allocated share without a ceiling in order to ensure that Member States can make their national policy choices in this area. Most importantly, Directive (EU) 2022/2523 would effectively set a ceiling which would effectively ensure that the effective tax rate is at least 15 %.

(14)

To provide space for growth and investment, Member States would also be allowed to individually apply additional post-allocation adjustments (e.g. tax treatment of pension contributions) in areas not covered by the common framework. Member States would also be free to further adjust their allocated share without a ceiling in order to ensure that Member States can make their national policy choices in this area , for example to generate resource efficiency, stimulate investment and create jobs . Such additional adjustments may include deductions, allowances, tax credits or other national corporate income tax measures, including those promoting research and development or other policy objectives, provided that such measures apply only to the allocated share of the tax base and do not affect the consolidated tax base or the allocation mechanism under this Directive . The post-allocation adjustment should, however, focus on input-based tax incentives. Member States should refrain from offering output-based tax incentives such as patent boxes and other intellectual property regimes.

(14a)

The Commission and the Member States should ensure the coherence and alignment of this Directive with the OECD/G20 Model Rules and with Directive (EU) 2022/2523, in particular as regards the calculation of the effective tax rate on a country-by-country basis, which could be undermined by the cross-border loss relief between BEFIT group members envisaged in this Directive. That dimension should be assessed in the revision of this Directive.

(15)

Some Member States operate corporate tax systems which are built on principles that differ from the most common approach, such as distribution-based tax systems. It is therefore of prime importance to put in place the necessary adjustments, in order to ensure a workable interaction with those systems. The solution could be sought in certain post-allocation adjustments. These would entail that the part which would be allocated to a group member under a distribution-based system has to be modified in proportion to the distributions made during the fiscal year. The essence of a distribution-based tax system would be fully retained, considering that the distribution marks a timing point for taxing the allocated part and accordingly determine how much of this would need to be taxed. In this regard, it should be envisaged to operate a carry-forward mechanism, to ensure that the allocated part which is not taxed in the current year would be taxable in the following years.

(15)

Some Member States operate corporate tax systems which are built on principles that differ from the most common approach, such as distribution-based tax systems. It is therefore of prime importance to put in place the necessary adjustments, in order to ensure a workable interaction with those systems and not to introduce a contradiction between the two systems, which would discourage business creation . The solution could be sought in certain post-allocation adjustments. These would entail that the part which would be allocated to a group member under a distribution-based system has to be modified in proportion to the distributions made during the fiscal year. The essence of a distribution-based tax system would be fully retained, considering that the distribution marks a timing point for taxing the allocated part and accordingly determine how much of this would need to be taxed. In this regard, it should be envisaged to operate a carry-forward mechanism, to ensure that the allocated part which is not taxed in the current year would be taxable in the following years. The possible inclusion of distribution-based tax systems within the scope of this Directive should be assessed after 5 years.

(17)

A common framework for corporate taxation would necessarily feature an administration system, which should ideally provide for a degree of tax certainty and simplification. To promote uniformity, the administration system would have to build on the importance of operating a centralised point of reference for dealing with a number of common issues, such as an Information Return for the entire group, and ensuring an adequate degree of coordination and collaboration amongst national tax administrations. At the same time, the administration system should fully respect national tax sovereignty as local tax returns, audits and dispute settlement would have to remain primarily at the level of the Member States.

(17)

A common framework for corporate taxation would necessarily feature an administration system, which should ideally provide for a degree of tax certainty and simplification. To promote uniformity, the administration system would have to build on the importance of operating a centralised point of reference for dealing with a number of common issues, such as an Information Return for the entire group, and ensuring an adequate degree of confidentiality and security, as well as coordination and collaboration amongst national tax administrations. At the same time, during the transition , the administration system should fully respect national tax sovereignty as local tax returns, audits and dispute settlement would have to remain primarily at the level of the Member States.

(18)

To ensure that the rules of the common framework are implemented and enforced correctly, Member States should lay down rules on penalties applicable to infringements of national provisions adopted pursuant to this Directive. Such penalties should be effective, proportionate and dissuasive.

(18)

To ensure that the rules of the common framework are implemented and enforced correctly, Member States should lay down rules on penalties applicable to infringements of national provisions adopted pursuant to this Directive. Such penalties should be effective, proportionate and dissuasive. Those penalties should be set at a minimum rate of 0,1 % of the turnover of the BEFIT group in case of failure to file the BEFIT information return accordingly and in case of deliberate misreporting in a BEFIT information return.

(18a)

A key pillar for improving corporate tax compliance is the establishment of a comprehensive one-stop-shop system that enables businesses to fulfil their tax obligations across Member States through a single, streamlined interface, thereby reducing administrative burdens, ensuring consistent enforcement, and enhancing legal certainty in the internal market.

(19)

To optimise the benefits of having a common legal framework for computing the corporate tax base in the internal market, the application of the rules should be optional for groups, including SME groups, who earn annual combined revenues of less than EUR 750 000 000 as long as they prepare consolidated financial statements and have a taxable presence in the Union. By keeping the application of the rules open to groups of a smaller size, more groups with cross-border structures and activities may benefit from the simplification that the common framework offers.

(19)

To optimise the benefits of having a common legal framework for computing the corporate tax base in the internal market, the application of the rules should be optional for groups, including SME groups, who earn annual combined revenues of less than EUR 750 000 000 as long as they prepare consolidated financial statements and have a taxable presence in the Union. By keeping the application of the rules open to groups of a smaller size, more groups with cross-border structures and activities may benefit from the simplification that the common framework offers. Companies choosing to be covered by this Directive should benefit from Member State and Commission technical assistance to comply with the new rules and thereby foster their cross-border activities.

(21a)

To guarantee efficient cooperation among BEFIT teams, Member States should dedicate adequate human resources to the BEFIT team, including by providing content and language training to the BEFIT team representatives and by relying on the FISCALIS programme.

(21b)

The Commission should, where appropriate, submit a legislative proposal for a harmonised, common European taxpayer identification number. This would not only facilitate the communication between the representatives of Member States and the BEFIT team, but also increase the efficiency of tax information exchange within the Union.

(25a)

In line with the legally binding roadmap on new own resources set out in the Interinstitutional Agreement of 16 December 2020 and the 2021 Commission Communication ‘An adjusted package for the next generation of own resources’, part of the revenues generated through the application of this Directive may be allocated to the general budget of the Union, in accordance with the applicable procedures under Council Decision (EU, Euratom) 2020/2053 (1a).

(ea)

extending the concept of a permanent establishment, to include a significant economic presence through which a business is wholly or partly carried on.

(a)

the company is either the ultimate parent entity of the group or any other company of the group in which the ultimate parent entity holds, directly or indirectly, at least 75 % of the ownership rights or of the rights giving entitlement to profit;

(a)

the company is either the ultimate parent entity of the group or any other company of the group in which the ultimate parent entity holds, directly or indirectly, at least 50 % of the ownership rights or of the rights giving entitlement to profit;

(b)

the head office of the permanent establishment is either the ultimate parent entity of the group or any other member (company or entity) of the group in which the ultimate parent entity holds, directly or indirectly, at least 75 % of the ownership rights or of the rights giving entitlement to profit.

(b)

the head office of the permanent establishment is either the ultimate parent entity of the group or any other member (company or entity) of the group in which the ultimate parent entity holds, directly or indirectly, at least 50 % of the ownership rights or of the rights giving entitlement to profit.

(a)

the financial accounts of the constituent entity are maintained on the basis of that accounting standard;

(b)

the information contained in the financial accounts is reliable; and

(c)

permanent differences in excess of EUR 1 000 000 that arise from the application of a particular principle or standard to items of income or expense or transactions, where that principle or standard differs from the financial standard used in the preparation of the consolidated financial statements of the ultimate parent entity, are adjusted to comply with the treatment required for that item under the accounting standard used in the preparation of the consolidated financial statements.

(a)

the amount of any unrealised foreign currency exchange gain or loss in relation to fixed assets and liabilities;

(b)

the amount of any provision recorded for unrealised foreign currency exchange loss.

(i)

interest or any other income generated by financial assets;

(ii)

royalties or any other income generated from intellectual property;

(iii)

dividends and income from the disposal of shares;

(iv)

income from financial leasing;

(v)

income from insurance, banking and other financial activities;

(vi)

income from invoicing companies that earn sales and services income from goods and services purchased from and sold to associated enterprises, and add no or little economic value.

(a)

all buildings as well as any other type of immovable property and structure in use for the business: 28 years;

(a)

all buildings as well as any other type of immovable property and structure in use for the business, with the exception of industrial buildings and structures: 30 years;

(aa)

industrial buildings and structures: 25 years;

(b)

all other fixed tangible assets: their useful life as assessed in accordance with the acceptable accounting standard in the Union referred to in Article 7;

(b)

all other fixed tangible assets: their useful life as assessed in accordance with the acceptable accounting standard in the Union referred to in Article 7 , but with a minimum of 10 years ;

a)

assets that contribute directly to the Union’s climate and social goals, in particular the enhancement of clean technology, energy efficiency and digitalisation;

b)

assets that contribute directly to the attainment of the UN 2030 Sustainable Development Goals;

c)

assets that contribute directly to the enhancement of the Union's defence, notably its ability to prevent and respond to emerging threats and crises, in accordance with the Preparedness Union Strategy.

a)

are fit for purpose,

b)

are a cost-effective way to achieve their policy objectives,

c)

have any negative or unexpected implications.

(b)

a negative amount, the loss shall be carried forward and shall be set off against the next positive BEFIT tax base.

(b)

a negative amount, the loss shall be set off against the taxable income of the ultimate parent entity and shall be carried forward for a maximum of 5 years and set off against the next positive BEFIT tax base. The deduction shall be in proportion to the holding of the ultimate parent entity in its qualifying subsidiaries as referred to in Article 3(1) and in full for permanent establishments. The reduction of the tax base of the resident taxpayer shall not result in a negative amount.

(a)

low-risk zone: where the expense incurred, or the income earned, by a BEFIT group member from intra-BEFIT group transactions increase in a fiscal year by less than 10 % compared to the average expense or income of the previous three fiscal years from intra-BEFIT group transactions;

(a)

low-risk zone: where the expense incurred, or the income earned, by a BEFIT group member from intra-BEFIT group transactions increase in a fiscal year by less than 15 % compared to the average expense or income of the previous three fiscal years from intra-BEFIT group transactions;

(b)

high-risk zone: where the expense incurred, or the income earned, by a BEFIT group member from intra-BEFIT group transactions increase in a fiscal year by 10 % or more compared to the average expense or income of the previous three fiscal years from intra-BEFIT group transactions.

(b)

high-risk zone: where the expense incurred, or the income earned, by a BEFIT group member from intra-BEFIT group transactions increase in a fiscal year by 15 % or more compared to the average expense or income of the previous three fiscal years from intra-BEFIT group transactions.

(i)

the impact of the transition allocation rule ;

(ii)

the link with other legislative acts in the area of corporate taxation, namely Directive (EU) 2022/2523 as well as the situation regarding Pillar One of the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy agreed by the OECD/G20 Inclusive Framework on BEPS on 8 October 2021 ;

(iii)

the relevance of the scope of this Directive and notably its potential extension to large groups as referred to in Article 3(7) of Directive 2013/34/EU;

(iv)

the relevance of removing the exclusion of shipping income from the preliminary tax result;

(v)

the impact on double tax treaties;

(vi)

the impact of the co-existence of two tax systems, at Union level and at national level, on the administrative burden for entrepreneurs and tax administrations resulting from the application of Section 5 of Chapter II;

(vii)

the impact of the allocation of the tax base on Member State revenues;

(viii)

the impact of the co-existence of distribution-based tax systems, as referred to in Article 49, with traditional corporate tax systems relying on annual taxes on corporate profits;

(ix)

the interaction of bilateral pre-accession tax treaties with the derogation from this Directive as referred to in Article 2(2).