What changed between the draft committee report and the plenary report

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the role of simple tax rules and tax fragmentation in European competitiveness

(2024/2118(INI))

The European Parliament,

Changed:– having regard to Article 4 and Articles 63 to 66 of the Treaty on the Functioning of the European UnionUnion, in particular Article 4 and Articles 63 to 66 thereof on the principles of the internal market, free movement of goods, services, capital and people, and of Articles 113, 114 and 115 thereof,

Removed:– having regard to the Treaty on the Functioning of the European Union, and in particular Articles 113, 114 and 115 thereof,

– 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 (the Interest and Royalties Directive),

Changed:– 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 (the Parent SubsidiaryParent-Subsidiary Directive),

Changed:– having regard to Council Directive 2022/2523/EC(EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation (15%)[15 %] for multinational enterprise groups and large-scale domestic groups in the Union, which is the European Union’sEU’s response to international tax coordination,

Changed:– having regard to the ongoing developments concerning the EU’s two-pillar solution to address the tax challenges arising from the digitalisation of the economy,

Changed:– having regard to the final reports of October 2015 published by the Organisation for Economic Co-operation and Development (OECD) on the OECD/G20 Base Erosion and Profit Shifting Project (BEPS) final reports of October 2015,Project,

– 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’,

Changed:– having regard to the OECD/G20 Inclusive Framework on BEPS statement of 8 October 2021 entitledon ‘Two-Pillara Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy’,Economy,

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

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

Added:– having regard to the G20 Rio de Janeiro Leaders’ Declaration of 19 November 2024 and the G20 Rio de Janeiro Ministerial Declaration on International Tax Cooperation of 25 July 2024,

Added:– having regard to UN General Assembly Resolution 79/235 of 24 December 2024, on the promotion of inclusive and effective international tax cooperation at the UN,

– 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),

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

Changed:– having regard to the Commission proposal of 22 December 2021 for a Council directiveDirective on ensuring a global minimum level of taxation for multinational groups in the Union (COM(2021)0823), as well as to Parliament’s position of 19 May 2022 on this proposal,

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

Changed:– having regard to the Commission proposal of 11 May 2022 for a Council directiveDirective 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),

Changed:– having regard to the Commission proposal of 8 December 2022 amending Directive 2006/112/EC as regards VAT rules in the Digital Age (COM(2022)0701), Commission proposal for a Council Regulation amending Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age (COM(2022)0703), Commission proposal for a Council directive amending Directive 2006/112/EC as regards the electronic value added tax exemption certificate (COM(2024)0278) and the Council agreement on VAT in the digital age package of 5 November 2024,(COM(2022)0701),

Removed:– having regard to Council Directive 2025/50 of 10 December 2024 on faster and safer relief of excess withholding taxes (FASTER),

Added:– having regard to the Commission proposal of 8 December 2022 for a Council Regulation amending Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age (COM(2022)0703),

Changed:– having regard to the Commission proposal of 128 SeptemberJuly 20232024 for a Council directiveDirective onamending BusinessDirective in2006/112/EC Europe:as Frameworkregards forthe Incomeelectronic Taxationvalue (BEFIT)added (COM(2023)0532),tax exemption certificate (COM(2024)0278),

Removed:– having regard to the Commission proposal of 12 September 2023 for a Council directive establishing a Head Office Tax system for micro, small and medium sized enterprises, and amending Directive 2011/16/EU (COM(2023)0528),

Added:– having regard to the Council agreement on VAT in the digital age package of 5 November 2024,

Changed:– having regard to theCouncil CommissionDirective proposal(EU) 2025/50 of 1210 SeptemberDecember 20232024 foron afaster Counciland directivesafer onrelief transferof pricingexcess (COM(2023)0529),withholding taxes (FASTER),

Changed:– having regard to the CouncilCommission conclusionsproposal of 1712 andSeptember 182023 Aprilfor 2024a Council Directive on aBusiness newin EuropeanEurope: competitivenessFramework deal,for Income Taxation (BEFIT) (COM(2023)0532),

Added:– having regard to the Commission proposal of 12 September 2023 for a Council Directive establishing a Head Office Tax system for micro, small and medium sized enterprises, and amending Directive 2011/16/EU (COM(2023)0528),

Added:– having regard to the Commission proposal of 12 September 2023 for a Council Directive on transfer pricing (COM(2023)0529),

Added:– having regard to the European Council conclusions of 17 and 18 April 2024 on a new European competitiveness deal,

– having regard to the Council conclusions of 24 May 2024 on a Single Market for the benefit of all,

Changed:– having regard to the European Council’s Budapest Declaration of 8 November 2024declaration on the New European Competitiveness Deal, adopted on 8 November 2024,

8 unchanged paragraphs

– having regard to the Council conclusions of 11 March 2025 on a tax decluttering and simplification agenda which contributes to the EU’s competitiveness,

– having regard to the European Council conclusions of 20 March 2025 on competitiveness, with a focus on simplification and the reduction of regulatory and administrative burdens,

– having regard to its resolution of 16 February 2022 on the implementation of the Sixth VAT Directive: what is the missing part to reduce the EU VAT gap?,

– having regard to its resolution of 7 October 2021 on reforming the EU policy on harmful tax practices (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,

– having regard to its resolution of 10 March 2022 on a European Withholding Tax framework, calling for a standardised withholding tax framework,

– having regard to its resolution of 4 October 2022 on the impact of new technologies on taxation: crypto and blockchain,

– 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),

Changed:– having regard to its resolution of 4 May 2022 on the follow-up to the conclusions of the Conference on the Future of Europe,

Removed:– having regard to its resolution of 15 June 2023 on lessons learnt from the Pandora Papers and other revelations, also calling for improving reporting and information sharing,

Added:– having regard to the Commission Joint Research Centre’s study of 19 April 2022 entitled ‘Local taxes on economic activity in municipalities in EU Member States’,

Added:– having regard to its resolution of 15 June 2023 on lessons learnt from the Pandora Papers and other revelations, also calling for the improvement of reporting and information sharing,

– having regard to its resolution of 12 December 2023 on further reform of corporate taxation rules,

– having regard to the report of 9 May 2022 on the final outcome of the Conference on the Future of Europe,

Changed:– having regard to the report by Enrico Letta report of April 2024 entitled ‘Much more than a Market’,market’,

Changed:– having regard to the report by Mario Draghi report of 9 September 2024 entitled ‘The future of European competitiveness’,

– having regard to Rule 55 of its Rules of Procedure,

Changed:– having regard to the report of the Committee on Economic and Monetary Affairs (A10-0000/2025),(A10-0155/2025),

Change 1

Removed:A. whereas EU Member States collected EUR 6,712 billion in taxes in 2023 (including compulsory actual social contributions), which represents 4.7 % more than in 2022;

Added:A. whereas effective, fair and efficient tax policies play a key role in promoting long-term sustainable growth and inclusive societies;

Removed:B. whereas in 2023, the tax burden (i.e. overall tax revenues as a share of GDP) in the EU stood at 39.0 % of GDP, a slight decrease as compared with 2022;

Added:B. whereas EU Member States collected EUR 6 712 billion in taxes in 2023 (including compulsory actual social contributions), which represents 4.7 % more than in 2022;

Added:C. whereas the EU faces a significant investment gap; whereas closing this gap is crucial to ensuring sustainable economic growth, enhancing competitiveness, and achieving the EU’s green and digital transition objectives;

Added:D. whereas in 2023 the tax burden (i.e. overall tax revenues as a share of GDP) in the EU stood at 39.0 % of GDP, a slight decrease compared with 2022, but still a significantly high ratio;

Added:E. whereas estimates suggest that global uncollected tax revenue amounts to approximately EUR 500 billion, of which an estimated EUR 100 billion is uncollected from the EU area; whereas additional revenue is impacted by instances of tax non-compliance and aggressive tax planning strategies; whereas these losses deprive Member States of essential public funding;