On the EU’s approach to corporate tax policy in a changing international environment

(2025/2210(INI))

The European Parliament,

–having regard to the Treaty on the Functioning of the European Union, in particular Article 4 and Articles 63 to 66 thereof on the principles of the internal market and the free movement of goods, services, capital and people, and Articles 113, 114 and 115 thereof,

–having regard to Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union1 (Pillar Two Directive),

–having regard to Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market2 (Anti-Tax Avoidance Directive (ATAD)),

–having regard to Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC3 (Directive on Administrative Cooperation (DAC)),

–having regard to Council Directive 2011/96/EU of 30 November 2011 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States4 (Parent-Subsidiarity Directive),

–having regard to Council Directive 2009/133/EC of 19 October 2009 on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States5 (Merger Directive),

–having regard to Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches6 (Country-by-Country Reporting Directive),

–having regard to the Commission’s February 2026 call for evidence for an impact assessment related to the Omnibus on taxation,

–having regard to the Commission proposal of 12 September 2023 for a Council directive on Business in Europe: Framework for Income Taxation (BEFIT) (COM(2023)0532),

–having regard to the Commission notice of 12 January 2026 entitled ‘The OECD Inclusive Framework Agreement on Safe Harbors and the Pillar Two Directive’7,

–having regard to the Organisation for Economic Co-operation and Development (OECD)/G20’s final reports on base erosion and profit shifting (BEPS), which were endorsed in 2015,

–having regard to the OECD reports on the Pillar One and Pillar Two blueprints, which were adopted by the OECD/G20 Inclusive Framework on BEPS on 14 October 2020, and to the results of the OECD economic analysis and impact assessment of 12 October 2020 entitled ‘Tax Challenges Arising from Digitalisation – Economic Impact Assessment’,

–having regard to the statement by the OECD/G20 Inclusive Framework on BEPS of 8 October 2021 on a Two-Pillar solution to address the tax challenges arising from the digitalisation of the economy,

–having regard to the Pillar Two model rules of the OECD/G20 Inclusive Framework on BEPS of 20 December 2021 for the domestic implementation of a 15 % global minimum tax,

–having regard to the OECD/G20 Inclusive Framework on BEPS report of 5 January 2026 entitled ‘Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two), Side-by-Side Package’,

–having regard to the Commission communication of 21 March 2018 on new requirements against tax avoidance in EU legislation governing in particular financing and investment operations (C(2018)1756),

–having regard to the Commission communication of 18 May 2021 entitled ‘Business Taxation for the 21st Century’ (COM(2021)0251),

–having regard to the Council conclusions of 11 March 2025 on a tax decluttering and simplification agenda which contributes to the EU’s competitiveness,

–having regard to US domestic legislation, especially the Tax Cuts and Jobs Act of 22 December 2017, which implemented the global intangible low tax income (GILTI) into US domestic tax law, and which has recently been renamed as the net controlled foreign corporation tested income (NCTI) for tax years beginning after 31 December 2025,

–having regard to the G20 Rio de Janeiro Leaders’ Declaration of 19 November 2024 and the G20 Rio de Janeiro Ministerial Declaration on international tax cooperation of 25 July 2024,

–having regard to the G7 statement on global minimum tax of 28 June 2025,

–having regard to UN General Assembly Resolution 78/230 of 22 December 2023 and UN General Assembly Resolution 79/235 of 24 December 2024 on the promotion of inclusive and effective international tax cooperation at the United Nations,

–having regard to its resolution of 7 October 2021 on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group)8,

–having regard to its resolution of 15 February 2022 on the impact of national tax reforms on the EU economy9,

–having regard to its resolution of 10 March 2022 with recommendations to the Commission on fair and simple taxation supporting the recovery strategy (EP follow-up to the July Commission’s Action Plan and its 25 initiatives in the area of VAT, business and individual taxation)10,

–having regard to its resolution of 12 December 2023 on further reform of corporate taxation rules11,

–having regard to its resolution of 9 October 2025 on the role of simple tax rules and tax fragmentation in European competitiveness12

–having regard to the report by Enrico Letta of April 2024 entitled ‘Much more than a market’,

–having regard to the report by Mario Draghi of 9 September 2024 entitled ‘The future of European competitiveness’,

–having regard to Rule 55 of its Rules of Procedure,

–having regard to the report of the Committee on Economic and Monetary Affairs (A10-0000/2026),

A.whereas taxation is a determining factor in the global competitiveness of EU companies; whereas fair, efficient and simple corporate taxation plays a central role in ensuring long-term economic growth and providing Member States with sufficient resources to meet their spending needs;

B.whereas direct taxation remains a national competence of the Member States, while international corporate taxation is governed by a complex set of bilateral treaties on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital, known as double taxation agreements, as well as multilateral instruments to prevent BEPS, and EU directives on combating tax avoidance (ATAD) and reinforcing administrative cooperation (DAC);

C.whereas the OECD estimates annual global revenue losses resulting from BEPS at between USD 100 billion and 240 billion, equivalent to approximately 4 to 10 % of global corporate income tax revenues, resulting in considerable losses for Member States’ budgets;

D.whereas economic activity has generally and significantly shifted away from physical presence, leading to a mismatch between where profits are generated and where they are taxed;

E.whereas the OECD/G20 Inclusive Framework on BEPS’ Two-Pillar solution seeks to modernise international tax rules through the reallocation of taxing rights to market jurisdictions (Pillar One) and the establishment of a global minimum effective corporate tax rate of 15 % (Pillar Two);

F.whereas negotiations on Pillar One have stalled at the international level; whereas, in this context, several Member States have introduced or maintained digital services taxes at national level; whereas Pillar Two has been fully or partially implemented by around one third of the 148 jurisdictions participating in the OECD/G20 Inclusive Framework, while some Member States have fully implemented it through the Pillar Two Directive;

G.whereas, on the initiative of the United States, an agreement was reached within the OECD/G20 Inclusive Framework on BEPS on a ‘side-by-side’ approach (SbS), which establishes a coordinated and simultaneous application of different minimum tax regimes; whereas in January 2026, the US NCTI system was granted safe harbour status under the SbS, which the Commission acknowledged through a Commission notice issued on 12 January 2026;

H.whereas recent EU reports stress the importance of tax simplification, the decluttering of fiscal rules and effective tax incentives as key instruments for restoring the EU’s competitiveness;

Competitiveness in international taxation

1.Emphasises the restoration of the EU’s competitiveness as a top priority; recalls that investment attractiveness requires a stable, predictable and easily navigable tax environment, and an optimal level of tax administration;

2.Welcomes international efforts, such as those undertaken by the OECD, which aim to stop the race to the bottom and create a more level playing field by establishing a global floor for the tax obligations of multinational enterprises (MNEs) through a minimum effective tax rate;

3.Regrets that the global implementation of Pillar Two remains incomplete, with major economies such as China and India not having implemented the reform; is of the view that the coexistence of Pillar Two with concurrent domestic minimum tax regimes leads to fragmentation and weakens its global application;

4.Notes with concern that the significant structural differences between the US NCTI regime and Pillar Two result in different effective tax rates that disadvantage EU-headquartered MNEs operating in the United States; notes, furthermore, that as a result of the SbS, US-headquartered MNEs are technically exempted from most Pillar Two obligations, thereby putting European companies at a competitive disadvantage;

5.Calls on the Commission to analyse and propose solutions on how to correct the structural imbalances created by the SbS, in order to safeguard a level playing field for European companies and the EU’s global competitiveness;

6.Calls on the Commission to fully deploy instruments to counter anti-competitive tax advantages that harm European companies, including State aid and anti-subsidy measures;

Need for simplification and clarity in EU legislation

7.Notes with concern that the SbS increases legal and administrative complexity, as well as compliance costs for EU-headquartered MNEs operating in the United States;

8.Welcomes the Commission’s work in preparing the Omnibus package on taxes; calls on the Commission to prioritise tax simplification by reviewing overlapping reporting and anti-tax avoidance measures under EU tax law and reducing administrative burden on EU-headquartered businesses – in particular by examining the continued necessity of the ATAD’s controlled foreign company provisions, and by reviewing and potentially simplifying the Parent-Subsidiary Directive, the Merger Directive, the Country-by-Country Reporting Directive and the DAC framework;

9.Calls on the Commission to re-examine its proposal for BEFIT, due to its fundamental incompatibilities with OECD Pillar Two rules;

10.Is concerned about the implementation of the SbS system as a safe harbour under Article 32 of the Pillar Two Directive, rather than through a proper legislative process;

11.Notes that the Member States will apply the Pillar Two Directive from different dates; calls on the Member States to ensure the full transposition of the directive to mitigate risks arising from mutual reliance on tax rulings issued by national tax administrations;

12.Invites the Commission to explore simplification measures to alleviate the implementation burden of Pillar Two on the tax administrations of smaller Member States;

State of the fight against harmful tax practices

13.Welcomes the contribution of Pillar Two to reducing the number of jurisdictions applying very low effective corporate tax rates and to the introduction of qualified domestic minimum top-up taxes in many jurisdictions, representing a major step towards preventing the tax avoidance practices of MNEs;

14.Notes that estimated revenue losses resulting from BEPS strategies by MNEs remain substantial; calls on the Commission and the Member States to intensify international cooperation to address this challenge and safeguard their domestic tax revenues;

Future of international cooperation in taxation

15.Reaffirms its commitment to the international rules-based order; stresses that internationally developed instruments are effective only insofar as they are backed by a genuine global agreement and effective implementation;

16.Regrets the fact that the EU’s digital services trade balance has tilted sharply towards other jurisdictions where digital technology and cloud service providers have expanded rapidly; points out that this shift is posing a significant challenge to Member States’ tax systems and requires a rethinking of the reallocation of taxing rights;

17.Takes note of the United States’ concerns regarding unilateral digital services taxes, which it views as discriminatory towards US technology companies; welcomes the United States’ openness to dialogue on these matters;

18.Is of the view that unilateral measures or double tax agreements cannot adequately tackle global tax challenges and risk opening the door to retaliatory measures, and that a global solution to digital taxation would therefore be the ideal way forward;

19.Takes note of ongoing negotiations within the UN Framework Convention on International Tax Cooperation, which aim to improve tax cooperation and transparency in a global context;

20.Invites the Member States to strengthen their coordination and to present a unified position in multilateral forums; further invites the Commission to assist the Member States in effectively representing their interests in such forums;

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21.Instructs its President to forward this resolution to the Council and the Commission.