Changes from plenary report to adopted text

RemovedEXPLANATORY STATEMENT

RemovedThe main rationale for establishing the 28th regime, a new corporate legal framework for emerging and existing innovative companies, start-ups and scale-ups including tax provisions, is to bolster competitiveness, resilience and strategic autonomy of the European Union in a radically changing global market. This new regime aims to strengthen the EU’s competitiveness through supporting innovative companies and closing existing innovation gaps particularly vis-à-vis the United States, China and other fast-growing markets, thereby, ultimately, enhancing prosperity and improving living conditions of EU’s citizens.

RemovedIts intention is not to harmonise the existing legal and regulatory frameworks for companies between Member States, which have evolved over time and continue to do so. Instead, it aims at complementing them by providing an optional framework for a specific group of companies responding to the rapidly shifting dynamics of economic competition, thus addressing their specific needs – including on tax matters.

RemovedThe 28th regime shall be one of the resourceful tools for achieving the goals set out in the Savings and Investment Union, because in its very nature it shall:

Removed• simplify access to higher-risk capital for SMEs, start-ups, and scale-ups and, at the same time, increase investors’ confidence by creating a more predictable environment, thereby enhancing investment protection and providing mechanisms to deal with potential losses;

Removed• stimulate private investment into R&D, particularly in those sectors, that are crucial for future growth (e.g. digital services and artificial intelligence);

Removed• eliminate major existing barriers to scaling up fast-growing innovative companies, which due to current regulatory hurdles, might otherwise relocate to other regions of the world offering a more suitable regulatory environment for their growth; and

Removed• remove the fragmented regulatory and tax framework, which currently represents one of the most significant and often impassable (cost-ineffectiveness) burdens for fast-growing companies.

RemovedThe Subcommittee on Tax Matters, being aware of the role of taxation in fostering more integrated financial markets within the European Union, recognises that the current fragmentation of tax systems among Member States places a burden on SMEs, start-ups and scale-ups, particularly for their growth and cross-border operations. At the same time, being conscious of the political sensitivity of taxation at both European and national levels, the Subcommittee aims to describe the major obstacles in the field of taxation, and outline viable options on how to overcome them, by proposing the possible design of a 28th tax regime for a particular subset of, or eventually, all companies, with the aim of strengthening the European Union’s competitiveness.