Background information

The Communication on Corporate Taxation in the 21st Century aims to promote a sound, efficient and fair corporate tax system in the EU. It sets out both a long and short-term vision to support Europe's recovery from the COVID-19 pandemic and to ensure adequate public revenues. It is part of a wider EU tax reform agenda in the years to come.

It was welcomed by two leading EU social partners' organisations –the BusinessEurope and the European Trade Union Confederation (ETUC) as a proper step towards rebuilding economy after the COVID crisis.

Content of measure

According to the Communication, firstly, the Commission will present by 2023 a new corporate tax framework in the EU that will reduce administrative burdens, remove tax obstacles and create a more business-friendly environment in the single market.

Second, a tax agenda has also been defined for the next two years of recovery from the COVID-19 crisis, including measures to promote productive investment and entrepreneurship, better secure domestic revenues, and support the ecological and digital transformation. The measures will include:

• Provide greater public transparency by proposing that some large companies operating in the EU publish their effective tax rates. Abuses related to the use of shell companies will also be combated by new anti-tax avoidance measures;
• Supporting economic recovery by encouraging companies to finance their activities with equity rather than debt.

Use of measure

n.a.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies EU (Council, EC, EP)	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: N/A

Involvement

Social partners were not directly involved, but had previously indicated the need to take similar steps.

Views and reactions

Supportive. The BusinessEurope stressed the need a modern corporate tax framework to overcome the current economic downturn, caused by the COVID-19 pandemic. The European Trade Union Confederation underlined that common rules for corporate tax across Europe, including those to neutralise the misuse of shell companies for tax purposes, will be crucial in paying fairly for the public investment needed for a real and fair recovery from the COVID crisis.

Sources

• 18 May 2021: COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Business Taxation for the 21st Century (ec.europa.eu)
• 18 May 2021: Corporate tax should support growth and investment (www.businesseurope.eu)
• 18 May 2021: Fair corporate tax crucial to Covid recovery