<img height="1" width="1" style="display:none;" alt="" src="https://dc.ads.linkedin.com/collect/?pid=271082&amp;fmt=gif">

The EU's Tax Priorities For 2021–27

03 Feb | By Smart MBS
SHARE:
The EUs Tax Priorities For 2021–27Despite the teething troubles reported following the end of the Brexit transition period, there will no doubt be a degree of relief felt among EU member states – including Ireland, as the UK's nearest neighbour – that other matters can now come to the fore.
Not least of these is the bloc's plans for revenue-raising tax reforms over the next few years, recently under discussion in the context of the 2021-27 EU budget. 
 
This budget is intended to maintain EU spending in key areas while addressing the economic fallout of the COVID-19 pandemic.
 
In this blog, we will look at the medium-term EU tax reform plans recently agreed by member states to fund the EU.

EU Own Resources

"Own resources" refers to how the European Union funds itself. EU countries contribute to a common EU budget, but unlike national budgets, the EU budget is an investment budget and under the terms of the EU treaties, expenditure is not permitted to exceed revenue.
 
Under existing arrangements, EU countries transfer a share of their annual gross national income (GNI) to the EU budget, with customs duties and value-added tax making up the remainder.
 
It has been argued, though, that this system, which has remained virtually unchanged for decades, is due for an overhaul, and the occasion of the 2021-27 budget negotiations, coming at a historic juncture for the bloc, presented the ideal opportunity.

Environmental And Digital Taxes Top The Agenda

A number of the EU tax proposals have been under consideration for many years in one shape or form. 
 
In autumn 2020, after warning that they would not approve a new EU budget unless
there was agreement on reforming the EU's funding sources, MEPs put forward a more concrete set of new own resources proposals.
 
On December 16, 2020, the Parliament agreed the next seven-year budget, including the possible introduction of a new environmental levy and a digital levy in 2023. The environmental levy may take the form of a "carbon border adjustment mechanism" under which imports would face a tax if the country of origin fails to take action equal to EU effort to tackle climate change.
 
In addition, they agreed a financial transaction tax and a "financial contribution linked to the corporate sector or a new common corporate tax base", with the details on these to be hammered out. 
 
Cementing EU priorities over the coming few years, the European Council, Parliament, and Commission also in December published their policy objectives for the period to 2024, observing that the EU needs to "ensure greater financial stability and protect ourselves against financial crimes, tax fraud, evasion and avoidance, and money laundering."
 
Meanwhile, looking to the even nearer term, a separate document set out EU legislative priorities for 2021, stating that the EU institutions would concentrate on policies designed to implement the EU's Green Deal, advance technological innovation "while pursuing fair digital taxation", work towards economic recovery and social fairness while looking to "ensure more transparency on the taxation of multinational businesses", and ensure "fair competition within the EU and [on] the global stage".
 
New call-to-action

Topics: Tax, Europe

Comments

Subscribe

View our Privacy Policy

Most Popular Posts

Recent Posts