Today, the European Parliament adopted a bold position on new EU legislation to curb tax avoidance by large companies operating within the EU, known by its acronym BEFIT - Business in Europe: Framework for Income Taxation. Its main goal is to simplify tax rules and to ensure a level playing field for businesses across the EU. 

The Parliament’s position, negotiated by S&D MEP Evelyn Regner, carries a strong progressive imprint, strengthening measures against tax avoidance and ensuring that digital giants are scoped-in, even where they do not have a physical presence. The Socialists and Democrats now call on EU member states to heed the Parliament’s call and finally move forward with this urgently needed tax reform. 

Evelyn Regner, S&D MEP and European Parliament’s rapporteur on BEFIT, said: 

“With the agreement on BEFIT, the European Parliament has shown that a fair and simple tax policy is possible. We prove that economic strength and fairness can go hand in hand. By ensuring a fairer distribution of revenues and closing loopholes, BEFIT supports businesses, protects public finances, and advances Europe’s social and environmental objectives. 

“In the European Parliament, we are united in the view that Europe must move forward together on corporate tax matters because if we want a true single market, we simply have no other choice. Our report calls for structure in a system that has evolved over decades but has never truly come together. Now the ball is in the Council’s court. It is time for the member states to act.” 

Jonás Fernández, S&D spokesperson on economic and monetary affairs, said:

“The Socialists and Democrats strongly support BEFIT as a major step towards our longstanding demand to harmonise the corporate tax base across the EU. This is necessary to curb harmful tax competition and significantly cut down on tax avoidance. 

“Today, the Parliament sends a strong message to member states – it is time to ensure that all large companies - including digital giants - play by the same rules and pay their fair share, regardless of where they are based. After years of delay, it is time to show leadership and act responsibly. Europe cannot afford to let unanimity stand in the way of a fair and modern tax system.” 

Note to editors:

The European Commission proposed BEFIT – a package of three directives on taxation – in September 2023. The aim is to establish a single set of rules for defining the corporate tax base for large companies operating within the EU. The proposal, however, does not harmonise corporate tax rates. 

BEFIT builds on earlier corporate tax reform attempts through the Common Consolidated Corporate Tax Base (CCCTB) proposals in 2011 and 2016, which failed due to a lack of unanimity in the Council. The new, more flexible proposals, designed to make cross-border business in the EU simpler and more transparent, are currently also stalled in the Council. 

The proposal falls under a special legislative procedure, which requires unanimity in the Council for its adoption, following consultation with the European Parliament and the European Economic and Social Committee.