Changes from report parliamentary committee draft to plenary report

EXPLANATORY STATEMENT

Your Rapporteur takes the view that in the current economic landscape, we must strive for simplification and reduce regulatory and administrative burden.

The European Union’s tax landscape is at a critical juncture, requiring a balance between fostering economic growth, enhancing competitiveness, and ensuring tax fairness. The evolving economic environment, marked by digitalisation and globalisation, requires coordinated tax policies to address cross-border challenges while reducing administrative burdens for businesses, particularly small and medium-sized enterprises (SMEs).

Change 17

ChangedThe principles enshrined in Article 4 of the Treaty on European UnionUnion, in particular in Article 4, and in the TreatiesTreaty on the Functioning of the European Union underscore the importance of the internal market, the free movement of goods, services, capital, and people. A predictable tax framework is fundamental to supporting the internal market and ensuring that businesses can operate efficiently across borders without undue complexity. While the EU has made progress in tackling tax evasion and avoidance, further measures are needed to reduce bureaucratic hurdles and create a more business-friendly environment, as highlighted in the Draghi report on “The Future of European Competitiveness”.

Change 18

ChangedTax simplification and digitalisation are key to reducing compliance costs and improving efficiency. The Commission’s commitment to cutting reporting requirements by 25 %25% (and at least 35 %35% for SMEs) is a step in the right direction. Ex-ante impact assessments for new tax-related proposals and competitiveness checks on existing measures will help align tax policies with broader economic goals.

Digitalising tax administration holds great potential for reducing administrative burdens. Leveraging artificial intelligence (AI) and digital tools can streamline compliance processes, making it easier for companies, especially SMEs, to navigate complex tax regulations.

Strengthened cooperation between Member States is crucial for tackling tax evasion and aggressive tax planning. Improved information exchange, coordinated audits, and enhanced enforcement mechanisms can strengthen the fight against tax abuse.

In conclusion, the EU’s tax agenda must prioritise simplification, digitalisation, and cooperation to create a fairer and more competitive tax environment. By reducing fragmentation and complexity, enhancing digital tools, and embracing coordinated policies, the EU can lay the groundwork for sustainable growth and prosperity in the years to come.