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EU prescription against corona debts: minimum tax and new own resources

As of: December 22nd, 2021 5:09 p.m.

The enforcement of minimum tax rates and the increased generation of own resources should flush more money into the burdened EU coffers. However, this could put a strain on the budgets of the member states.

By Jakob Mayr, ARD-Studio Brussels

Johannes Hahn does not skimp on big words, the EU budget commissioner even speaks of a historic moment: Now it is very concrete from which new sources the EU wants to draw its own income. “This is a milestone on the way to a more independent EU budget, paid for by a new generation of EU own resources.”

Jakob Mayr
ARD studio Brussels

Among other things, the Commission is relying on income from emissions trading. This currently applies to Europe’s industry and is to be expanded and tightened as part of the climate protection plans. Brussels also wants to introduce a new trade in emissions credits for buildings and transport.

EU budget commissioner Johannes Hahn wants to generate more own resources for the Union.

Image: CUKIC / EPA-EFE / REX / Shutterstock

Debt Reduction and Climate Social Fund

So far, most of the revenues from this flow into the budgets of the member states. In the future, according to the commission, a quarter of the proceeds will be reserved for the EU budget to pay debts for the Corona reconstruction and to finance a climate social fund. This is intended to support poor households and small companies in making sustainable change.

Brussels is also demanding the lion’s share of the revenue from the planned border adjustment mechanism for the EU budget – a surcharge for imports from non-EU countries that do not produce according to local climate standards.

Member countries have to back off

So more money in the EU pot, less money in the coffers of the EU countries – but Commissioner Hahn reassures him: “If we do not get any new own resources, it will be at the expense of the member states and the entire EU budget. That is why I am very confident that it is in the interests of all member states and useful and important to introduce new own resources. “

Hahn expects that the new sources of income will generate up to 17 billion euros annually in the EU coffers between 2026 and 2030. Changes in the international tax system also contribute to this. According to this, large corporations have to pay tax on some of their profits in the countries where they do business, but have often not paid any taxes so far. In addition, in October more than 130 countries under the umbrella of the industrialized countries organization OECD agreed a minimum effective tax of at least 15 percent for globally active companies.

Countries should align tax levels

The EU Commission is now implementing this, with Economic Commissioner Paolo Gentiloni emphasizing: “We will continue to have different levels of corporate taxation in different countries. We are introducing a cap, a limit to end competition downwards, at least 15 percent effective taxation. “

EU economic commissioner Gentiloni wants to act more consistently against letterbox companies.

Image: dpa

The Commission also wants to take action against corporations or individuals who use letterbox companies or shell companies to avoid taxes. “We’re tightening the screws,” says Gentiloni – through reporting requirements and new criteria that should make it easier for national tax authorities to track down companies that only exist on paper. “These two proposals will significantly reinforce the Commission’s toolkit to combat harmful tax practices and improve tax equity in the EU and around the world.”

Fast implementation required

The financial expert for the Greens in the European Parliament, Rasmus Andresen, welcomes the Commission’s proposals. He calls it logical to implement the international agreement on a European basis and reserve additional income for the EU budget.

“It is high time that Brussels presented a proposal for new own resources,” said the economic policy spokesman for the Christian Democratic EPP group in the EU Parliament, Markus Ferber. The CSU politician appealed to the EU governments to work on the plans seriously and quickly.

EU prescription against corona debts: minimum tax and other own resources

Jakob Mayr, BR Brussels, December 22nd, 2021 4:29 p.m.

Reference-www.tagesschau.de

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