The European Commission has published responses to the consultation on its proposals for a common set of corporate tax rules across member states, known as Business in Europe: Framework for Income Taxation (BEFIT).

Responses to the BEFIT consultation will feed into the European Commission’s thinking around any proposals for common corporate tax rules. Adoption of these proposals is still noted as the third quarter of 2023. 

Around two-thirds of public consultation survey respondents (50/77) agree or strongly agree that the current situation, with 27 different national corporate tax systems, gives rise to problems in the internal market. However, some business associations are happy with the status quo. 

Taxpayers and administrations expressed mixed views as to whether the proposed approach would lead to simplification. There was also no consensus on compliance costs: some thought that compliance costs would increase, whereas others thought that harmonisation might lower compliance costs. 

Other points to note include: 

  • The three most “important” objectives of a new corporate tax framework should be: 1. the growth of business activity in Europe, 2. the attractiveness for investors due to a more competitive single market, and 3. greater legal certainty within the EU.
  • Most of the survey respondents believe that for calculating the tax base, making limited adjustments to a company’s financial accounts is effective or very effective (almost 60%) compared to the possibility of putting a comprehensive set of corporate tax rules in place (almost 25%).
  • A clear majority – 57% (44/77) – agreed on including cross border loss relief in the system.
  • Over 50% agreed or partly agreed (42/77) with the concept of a formulary apportionment. 

Read more on views expressed during the consultation process: 

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