The EC Considers Introducing a Corporate Tax

The European Commission is considering a new corporate tax to finance the repayment of debt related to planned allocations for assistance to European economies and sectors hardest hit by the coronavirus crisis, the Commission announced on Monday.

With the new levy on the corporate sector, the variants of which are being considered, around 10 billion euros would flow into the EU budget annually, which is less than 0.2 percent of the revenue generated by large companies from operations in the EU, according to the EC.

According to a plan that is still awaiting approval or amendments from the 27 member states, the EC would borrow a staggering 750 billion euros on the market to finance allocations for measures to revive economies affected by the coronavirus crisis. Brussels has proposed several possible levies to finance the repayment of this debt, including a new tax for the single market that could come into effect as early as 2024.

– Depending on the form of this tax, whether in the form of a flat fee or a charge based on the size of the company, or as part of the corporate tax, around 10 billion euros could be raised without overburdening any individual company – said an EC spokesperson.

– Ten billion euros is less than 0.2 percent of the revenue generated by large companies from operations in the EU – she added, noting that the expected annual revenue is a preliminary estimate.

Among the new sources of revenue for the common EU budget to finance the repayment of debt related to incentives, the Commission is also considering other options, including a tax on plastic and a levy on the carbon footprint for imports.

Leading EU budget official Johannes Hahn, in an interview with the Sunday edition of the Financial Times, stated that the tax for the single market could affect 70,000 companies in Europe with global revenues exceeding 750 million euros, Reuters recalls.

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