Future perspectives of European corporate taxation. Towards an harmonized European Corporate taxation within the Member States

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Summary: 1. Introduction into the topic concerning EU corporate taxation. – 1.1. Overview of the EU corporate framework. – 2. European perspectives – Challenges and Flagship Initiatives. – 2.1. Access to finance for technology-intensive scale-ups. – 2.1.1 Challenges. – 2.1.2 Flagship initiative on the financing of scale-ups in the field of technology-intensive innovation . – 2.2. Prospectives regarding the European Corporate taxation: Incentives to restore a balance of debt and equity. – 2.3. Consistency with existing and possible future rules in this area -2.4) Stock exchange listing. – 2.5. Late-stage financing through venture capital. – 2.6. Increasing diversity and revitalising investment. – 3. EU tax policy framework. – 3.1 Context. – 3.2 Ensuring effective taxation. – 4. Future perspectives regarding the Reform of the international framework for corporate taxation. – 5. Conclusions.

Abstract: The European Commission has proposed an exemption to reduce debt incentives (DEBRA) to facilitate companies’ access to finance and promote their resilience. The introduction of an allowance is intended to provide equity, they are treated in the same way as debt capital. Tax systems in the EU allow the deduction of debt interest payments when calculating the tax base for corporate tax purposes, while capital financing costs such as dividends are largely non-deductible. This imbalance in tax treatment is one of the factors that favours the use of debt versus equity to finance investments. This Directive is part of the EU corporate taxation strategy targeted at guaranteeing a fair and efficient tax system across the EU. In order to prevent abuse, the deductibility of the allowance has already been limited to a maximum of 30 % of the taxpayer’s EBITDA for each tax year by means of the ATAD Directive by the project to combat profit shortening and profit shifting (BEPS) and the implementation at EU level through the ATAD Directive. It is proposed to coordinate the two restrictions. The Proposal also supports the EU Capital Markets Union Action Plan, which to help raise capital in the post-pandemic period. With the Capital Markets Union will incentivise long-term investments to ensure sustainable and to promote the transformation of the EU economy. The EU commission has suggested several recommendations to solve problems, which enterprises are facing. The removal of obstacles, lack of partners and opportunities, and difficulties in financing should be a priority within the EU. The future of the EU corporate taxation law should reflect a more coordinated approach across all EU policies.