Tax MEPs hear out experts on BEFIT, the planned common tax base for businesses  

The hearing, organised by the EP’s subcommittee on tax matters, is the first such discussion on the initiative in the Parliament and will feed into the on-going work of MEPs who are drawing up their position ahead of the Commission’s legislative proposal expected later this year.

Opening the hearing, Paul Tang, the Chair of the subcommittee reminded that the BEFIT initiative would be a win-win situation, providing a single rule book to reduce the tax burden on businesses while also allowing for a fairer allocation of taxation rights across the member states. “There is a lot of potential for a common European tax base”, Mr Tang said.

MEPs heard from Christian Kaeser, Global Head of Tax of Siemens, Chair of the Tax

Committee of the Federation of German Industries, Gerhard Huemer, Director of Economic and Fiscal Policy of SMEunited, and Simon Loretz, Senior Economist at the Austrian Institute of Economic Research (WIFO).

During the question and answer session, MEPs expressed worry that the proposals would suffer the same fate as previous initiatives, and also pushed back against ideas voiced by some on the panel that the system should not be mandatory. The business representatives on the panel were asked to explain why they had misgivings against EU fiscal harmonisation.

They also sought to understand what business considered as the initiative’s biggest burden, as contained in the first ideas floated by the Commission and how BEFIT could be made more appealing. More specifically MEPs asked about the scope and the allocation of taxable profits. MEPs tried to gauge how the initiative would affect the revenue generation of large and small member states.

Finally, MEPs underlined that the initiative needed to contribute to creating a system which cut red tape and bureaucracy for businesses, and especially took the concerns of SMEs on board.

You can watch the hearing again here.