Key facts
- The European Commission is considering watering down a proposed tax on companies with a net turnover exceeding €100 million.
- The tax, known as CORE, is designed to fund the EU's next seven-year budget.
- Proposed changes include exempting less profitable firms and raising the eligibility threshold.
- Critics argue that these modifications may not be sufficient to secure an agreement.
- Other proposed EU-wide taxes include levies on carbon imports (CBAM), e-waste, and tobacco revenues.
The European Commission is exploring adjustments to a proposed tax on large businesses, known as the Corporate Resource for Europe (CORE), as part of ongoing negotiations for the EU's next seven-year budget. The CORE tax, which would charge an extra 0.1 percent on companies operating in the EU with a net turnover exceeding €100 million, has faced significant opposition from business lobbies, political groups, and national capitals. Critics argue that taxing revenues instead of profits is unfair and that the levy could hinder the EU's competitiveness.
To address these concerns, the Commission is considering exempting less profitable companies and raising the eligibility threshold, potentially carving out small and medium-sized enterprises and sectors like Germany's automotive industry. However, some officials and critics believe these changes might be superficial and insufficient to achieve a consensus.
This tax reform is part of a broader effort by the Commission to introduce new revenue streams, or 'own resources,' to fund increased spending on defense and competitiveness, as well as to manage post-pandemic debt, without solely relying on higher contributions from member states. Other proposed taxes include levies on carbon imports (CBAM), carbon emissions, electronic waste, and tobacco revenues. The EU Council presidency is expected to present a new package of tax proposals ahead of an October leaders' summit, with discussions ongoing to identify which of the eight potential taxes command the most support.