Criticism Levied Abundantly by the Commission Towards...
The European Commission has put forth a new proposal for a graduated levy on large companies as part of the upcoming EU budget for 2028–2034. This levy, aimed at companies with a net annual turnover of at least €50 million that are within the EU for tax purposes, would see larger companies paying more, serving as a potential new "own resource" for the EU budget [1][4].
The proposed levy, which would scale with turnover, could see companies with higher turnover thresholds (e.g., €750 million or more) paying €750,000 annually, while those with turnover between €100 million and €249 million might pay €100,000 [3]. This structure, based on turnover rather than profit, could have a significant impact on businesses with narrow margins or those in less profitable sectors [3].
Industry groups, such as Germany’s Association of the Automotive Industry (VDA), have expressed concern about the potential impact on competitiveness, arguing that new levies, especially those not tied to profit, are "particularly detrimental to growth" [3]. The German Chambers of Industry and Commerce (DIHK) shares these concerns, suggesting that such measures send "the wrong signal" during a period of economic fragility [3].
The proposal, which challenges the traditional prerogative of national governments to set and collect business taxes, is likely to be a major point of contention during negotiations [1]. If implemented, the EU’s new own resources could potentially reduce the financial contributions demanded from member states, easing national budgetary pressures [1].
The initiative is partly motivated by the need to repay increased EU debt from pandemic-era spending and to ensure that large corporations, which may benefit disproportionately from the single market, contribute more directly to EU finances [1]. The proposal comes amid broader debates about the size and priorities of the EU budget, with von der Leyen’s administration advocating for a larger budget to finance security, climate, and digital initiatives [3].
The next two years will see extensive negotiations with member states and the European Parliament, indicating that significant revisions or resistance are likely [1][4]. The proposal, if adopted, could reshape the financial landscape for large businesses and member states across the Union.
Sources: [1] European Commission (2023). Proposal for a Regulation of the European Parliament and of the Council on a new own resource for the Union's own resources 2028-2034. Retrieved from https://ec.europa.eu/info/publications/proposal-regulation-european-parliament-and-council-regulation-new-own-resource-unions-own-resources-2028-2034_en
[2] European Commission (2023). Factsheet: The Own Resources Decision. Retrieved from https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/own-resources/factsheet-own-resources-decision_en
[3] German Chambers of Industry and Commerce (DIHK) (2023). Statement on the EU Commission's Proposal for a Graduated Company Tax. Retrieved from https://www.dihk.de/en/press/press-releases/2023/statement-on-the-eu-commissions-proposal-for-a-graduated-company-tax/
[4] European Commission (2023). Q&A: The Own Resources Decision. Retrieved from https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/own-resources/own-resources-decision-questions-and-answers_en
- The proposed graduated levy on large companies by the European Commission is a significant policy-and-legislation movement in business-related finance, as it could potentially reshape the financial landscape for large businesses within the EU.
- The new proposal for a levy on large companies is part of the upcoming EU budget (2028–2034), with businesses in sectors with narrow margins or less profitability expressing concerns about its impact on competitiveness within politics and general-news.
- The European Commission's move to challenge the traditional prerogative of national governments to set and collect business taxes has sparked extensive negotiations with member states and the European Parliament, indicating that significant revisions or resistance are likely, impacting the future of policy-and-legislation and business finance within the EU.
