Changes from report parliamentary committee draft to plenary report

Added6. Underlines that the 28th regime must not, under any circumstances, enable the circumvention of mandatory domestic protection of workers, their social rights, representatives and trade unions, nor become a vehicle to undermine, reduce or weaken existing levels of protection at EU or national level; highlights that the 28th regime should support innovation, transparency of company policies and the dimensional growth and scalability of companies by encouraging the removal of legal and tax obstacles that limit cross-border development and expansion as well as tax fairness, while effectively preventing tax, social and regulatory disparities;

Removed7. Calls for a layered, modular and pilot-based approach with corporate law in the forefront; yet insists on a roadmap, of what should be added and when, to be known from the outset and continuously adjusted as a result of a periodic review process;

Added7. Stresses that the benefits of digitalisation and the simplification of compliance requirements that will be introduced under the tax module of the 28th regime (hereinafter the ‘tax module’) should be made available to all companies under ‘EU Inc.’;

Removed8. Emphasises that the scope of the 28th regime, notably in the area of taxation, should be limited to, as a starting point, a restricted category of companies, such as innovative firms or cross-border growth-oriented start-ups, being defined by the criteria such as their R&D expenditure, size, qualification of their workforce, ownership of intellectual property rights or defined by the forthcoming European innovation act;

Added8. Considers that the 28th regime is a strategic step towards the further deepening of the single market, thereby advancing European integration and improving the functioning of the single market and its competitiveness;

RemovedThe principles of taxation under the 28th regime

Added9. Stresses that the 28th regime should be established through a modular approach; understands that the proposed regulation establishing a corporate legal framework (‘EU Inc.’) is a first step onto which other modules can be added, including on taxation (tax module); considers that these future modules should cover relevant aspects of the entire life cycle of companies, and be continuously evaluated against international benchmarks;

Removed9. Reiterates that companies which voluntarily opt into the 28th regime should be bound by its rules and that their choice to opt into the 28th regime must be automatically recognised in the Member States’ legal frameworks; recalls that an exit from the regime must be mandatory upon the achievement of an initial public offering or after the specified period has elapsed;

Added10. Considers that the tax module could be added to the legislative proposal for a regulation establishing a corporate legal framework (‘EU Inc.’), which should extend into the field of taxation, in a targeted, ambitious and proportionate manner; considers that the potential benefits of the tax module include lower compliance costs, simplified regulatory procedures, enhanced legal certainty, predictability and smoother access to cross-border markets, thereby improving and deepening the European single market;

Removed10. Is of the opinion that in the early stages of a company’s life cycle, speed and simplicity, without the need to establish separate legal forms in each Member State, are crucial in transforming an innovative concept into a viable entity; stresses that for the 28th regime a single, fully digital registration at the One-Stop Shop, along with the provision of a single tax number, including fully standardised documentation, templates and a single tax-filing interface, and respect for the English-first principle, must be set by default;

Added11. Notes that for a tax module to be attainable under the existing Treaty framework, and where the applicable legislative procedure does not yield results, either an opt-in structure of the relevant legislation, or enhanced cooperation as a last resort, should be considered in order to address tax policy shortcomings; notes that tax policy remains subject to unanimity in the Council of the EU; is of the opinion that transitioning to the use of qualified majority voting is necessary in certain aspects of tax policy such as in the implementation of international agreements signed by all Member States, certain administrative procedures or legal definitions, in order to prevent unanimity from limiting regulatory harmonisation- and stopping citizens and businesses from fully benefiting from the single market; notes that such a module should be designed as an optional, clear and legally secure system, open to the accession of other Member States at any time, avoiding further fragmentation and ensuring the coherence of the single market;

Removed11. Highlights that the single accounting standards must be applied by default;

Added12. Insists that the 28th regime must effectively reduce compliance complexity for participating companies and must not create a parallel rulebook layered on top of national legal systems leading to increases in legal distortions, overlaps or inconsistencies, or additional administrative burden; recalls that the primary goal of the new regime is simplification and competitiveness, and that these must be ensured at all times while striving for upward social convergence;

Added13. Emphasises that the objective of both the 28th regime and its tax module is not to create an unfair tax advantage for companies or their employees, but to substantially reduce the complexity and administrative burden arising from different obligations, while respecting the specific characteristics of such companies;

Added14. Emphasises that in order to avoid further complexity, the provisions of the 28th regime should be in line with any other major proposals of the Commission and relevant Organisation for Economic Co-operation and Development (OECD) guidelines regarding greater integration within the single market, namely in the field of taxation and applicable tax legislation, notably in EU anti-avoidance and anti-evasion frameworks, including the Anti-Tax Avoidance Directive12 (ATAD);

Added15. Calls for a modular and pilot-based approach for the 28th regime with corporate law in the forefront; stresses that those modules must effectively reduce compliance complexity for participating companies, yet insists upon the adoption of a road map, regarding what should be added and when, to be known at the outset and continuously adjusted under a periodic democratic review process;

Added16. Emphasises in this context that, aiming to ensure (political) feasibility and in order to preserve Member States’ control over a substantial part of their tax policy as provided for under current legal frameworks, the scope of the tax module should be limited to, as a starting point, a subset of companies, such as cross-border growth-oriented start-ups and scale-ups, which typically generate only limited corporate income tax revenues for Member States; takes note of the Commission recommendation of 18 March 2026 establishing a definition of such companies using criteria such as their research and development (R&D) expenditure and size, which accompanied the ‘EU Inc.’ proposal;

Added17. Underlines that all tax incentives within the framework of the 28th regime must be fully compatible with State aid rules and designed in a way that avoids harmful tax competition, while ensuring a level playing field within the single market;

Added18. Reiterates that companies which voluntarily opt into the 28th regime and its tax module should be bound by its rules and that their choice to opt in must be automatically recognised by all Member States’ legal frameworks, allowing them to operate like any other nationally registered company in any Member State’s market; recalls that entry into the 28th regime should be optional, yet the exit from it should be mandatory upon the achievement of clearly defined criteria, including an initial public offering; highlights in this context that the non-discrimination principle vis-à-vis national company legal forms should be applied;

Added19. Notes that conditions of exit must be established for companies deciding to opt out on their own initiative, including notice requirements, possible minimum participation periods, and the entry into force of the withdrawal and that, once the relevant criteria for exit are met, sufficient time must be provided to allow for the necessary transformation of companies, ensuring a predictable and gradual transition while minimising the opportunities for regulatory arbitrage;

Added20. Acknowledges that legal form neutrality and fiscal non-discrimination are essential in ensuring sufficient demand for the regime; calls on the Commission, if necessary, to amend the EU acquis related to taxation, whether directly or indirectly, in order to ensure that companies operating under the 28th regime can fall within their own scope, and to simplify and further harmonise the procedures for accessing the benefits of those directives;

Added21. Is of the opinion that in the early stages of a company’s life cycle, speed and simplicity, without the need to establish separate legal forms in each of the Member States, are crucial to transform an innovative concept into a viable entity; stresses that for the 28th regime a single, fully digital registration at the One-Stop Shop, along with the provision of a single tax number, including fully standardised documentation, templates and a single tax-filing interface, and respecting an English-first principle for communication, without compromising the EU’s other official languages, should be set by default; recalls that the 28th regime should combine clear legal architecture, meaningful and ex ante quantifiable benefits to companies, and robust institutional support; highlights the synergies with the proposal on the establishment of European Business Wallets (COM(2025)0838), designed to establish a seamless and secure environment for digital interaction between economic operators and public sector bodies;

Added22. Notes that the One-Stop Shop, or alternatively a different central hub, should also function as a digital platform supporting companies throughout their life cycle within the 28th regime and its various modules; highlights that it should provide streamlined access to relevant regulatory, tax and administrative information across Member States, ensuring transparency and legal certainty, as well as including the possibility of incorporating, managing and dissolving activities;

Added23. Without prejudice to any further protective measures, emphasises that anti-tax avoidance measures laid down by current EU law must be applied thoroughly; stresses that only companies with real economic activities within the EU should have access to the tax module and that this module should not lead to the creation of shell or letterbox companies, as such practices undermine regulatory integrity, distort fair competition and erode genuine economic activity within the EU; underlines that the tax module should not become a tool for ‘tax shopping’ and must, under no circumstances, become a vehicle to unduly reduce or circumvent current levels of taxation at EU or national level;

Added24. Considers that a company for which infringement has been officially established of binding rules regarding fraud, tax, social security evasion or employee participation should be ineligible to opt in to the tax module;

Added25. Highlights that a transparent, accountable and efficient financial reporting framework is a necessity, and that the Single Accounting Standards should be applied by default for all companies operating under the 28th regime across all participating Member States, building on internationally recognised standards such as International Financial Reporting Standards where appropriate;

Taxing corporate income

Change 4

Changed12.26. ProposesIs of the opinion that the 28thlack regimeof mustcorporate tax policy harmonisation represents a significant obstacle to cross-border economic activity within the EU, while also increasing risks of aggressive tax planning; proposes therefore that to provide a clear, effective and transparent tax regime, the future tax module should aim for a single consolidated corporate tax base for participating companies across the EU; recalls earlier initiatives, such as the Common Corporate Tax Base, the CCCTB, BEFIT, and the Head Office Tax System for SMEs model, and proposes that the 28th regimetax shouldmodule provide a uniform method for determining taxable income,income in line with OECD guidelines, thereby eliminating fragmentation in tax base calculation and reducing cross-border uncertainty; notesstresses that,that drawingthe fromtax module must not further limit the debt-equitydiscretion biasof reductionMember allowanceStates proposal,to set corporate tax rates; stresses that the 28th regime should prioritise genuine consolidation in order to ensure neutralitythe betweeneffective debtcross-border andoffset equityof financing;losses, thereby incentivising cross-border investment;

Change 5

Removed13. Proposes that, even in the absence of a single consolidated corporate tax base, losses incurred in one Member State must be recognised throughout the regime and should be permitted to be carried forward or offset against profits generated elsewhere within the system, and that automatic cross-border loss relief should be considered essential for innovative and high-growth firms; acknowledges that in the absence of a harmonised definition of losses, tax deferral represents an option;

Added27. Notes that, pointing towards the debt-equity bias reduction allowance proposal, the module should promote neutrality between debt and equity financing, so as to remove structural tax biases and strengthen equity-based investment, which is particularly important for start-ups and scale-ups relying primarily on equity financing in the early stages of their development;

Removed14. Proposes that the consolidated tax base be appropriated among the Member States using a pre-agreed formula reflecting real economic activity, such as sales, labour and tangible assets, replacing complex intra-group transfer pricing disputes within the regime with a transparent allocation method;

Added28. Proposes that the 28th regime should seek to simplify tax administration and reduce cross-border uncertainty, including, where possible, by standardising tax returns, avoiding duplicative returns, and improving communication among tax authorities and the application of the ‘digital first’ principle;

Removed15. Stresses that double taxation must be prevented through, for instance, the uniform classification of capital gains and intra-regime payments, the automatic mutual recognition of tax status and a binding EU-level fast-track arbitration mechanism for dispute resolution;

Added29. Proposes that the consolidated tax base be appropriated among the Member States using a pre-agreed formula reflecting real economic activity, such as sales, labour, tangible assets and digital presence, replacing complex intra-group transfer pricing disputes within the regime with a transparent allocation method in line with OECD guidelines; stresses that this would be both a simplification and a tool to fight tax avoidance;

Added30. Recalls that tax rates must remain within Member States’ competence; notes, however, that they could be filed through a single filing interface;

Added31. Stresses that double taxation must be effectively prevented through, for instance, the uniform definition and classification of capital gains, intra-regime payments or the automatic mutual recognition of tax status;

Added32. Proposes that Member States should consider introducing special panels within their national courts dedicated to disputes regarding the tax module, and that it should be possible for such panels to conduct dispute resolution in English;

Added33. Highlights that cross-border scaling up may entail frequent corporate mobility events and reorganisations, and that, with the intention of benefiting from the current framework for tax-neutral operations, the tax module should involve the extension of current EU law and address mobility-related tax frictions through enhanced administrative coordination and greater substantive certainty, while ensuring that any simplification measures remain subject to appropriate safeguards against abuse13;

Value added tax

Change 6

Changed16.34. Emphasises that to reduce compliance burdens, regime participants must operate under a centralised VAT framework, where a single EU VAT number and digital One-Stop Shop8Shop14 portal must cover declarations and refunds across the Member States;States, including through timely and efficient refund procedures and a reduced need for multiple registrations; highlights the importance of promoting the use of interoperable digital solutions, including e-invoicing, to simplify compliance, enhance transparency and reduce administrative costs; recalls that the objective under the tax module should be procedural simplification rather than the harmonisation of VAT rates, enabling companies to expand without multiplying administrative interfaces;

Withholding tax

Change 7

Changed17.35. Highlights that cross-border capital flows mustwithin the module should benefit from harmonisedmore coordinated and efficient treatment, whereby dividends, interest and royalties between participating entities and their associated investment vehicles should benefit and be exemptsubject fromto a common simplified withholding tax;tax procedure and minimum effective taxation; proposes that immediate recognition of tax residence must be achieved through a centralised EU digital registry, enabling streamlined digital clearance procedures and eliminating manual refund delays9;delays identified as a key barrier to scaling in the EU15;

Change 8

Removed18. Calls for the development of a clear and effective definition of beneficial ownership;

Added36. Calls for the development of a clear and transparent definition of beneficial ownership for tax purposes that would identify real owners of firms, or at least a comprehensible and broadly accepted set of criteria upon which withholding tax relief should be offered at source, and lengthy refund procedures should be avoided, yet maintained in situations when none of the criteria are met;

Employee taxation

Change 9

Changed19.37. ProposesWelcomes thatthe Commission proposal for the optional use of EU employee stock options respectwithin twothe principles,wider firstly‘EU Inc.’ proposal and in particular its principle that taxation should occur at disposal and secondlybenefit from the same tax treatment as applicable to other employee stock options or similar instruments under national law; believes, however, that the implementation of an EU employee stock option scheme should be mandatory under the tax module; notes that gains should be treated as capital income rather than employment income, therefore aligning employee incentives with long-term company growth and removing the distorting effect of upfront taxation; supports addressing the question of convertibility with stock options schemes across Europe to ease the conversion of existing companies to the 28th regime;

Change 10

Removed20. Calls for a standardised EU valuation method providing safe harbour rules to determine share value in non-listed companies, preventing retroactive reassessments and reducing legal uncertainty;

Added38. Stresses the role of employee share schemes and similar mechanisms in creating incentives for attracting talent and key personnel within such companies; highlights that key personnel include founders and other essential employees whose skills and expertise are critical to the company’s development; emphasises that a transparent, economically sound and predictable tax regime for such instruments is essential to retain these companies within the EU and to attract and retain talent on terms comparable to those available in other competing jurisdictions;

Removed21. Recalls the option that social security contributions and pension income taxes applicable to employees of the company participating in the 28th regime be determined according to the rules of the company’s head-office jurisdiction, thereby enhancing legal certainty and reducing cross-border administrative burdens;

Added39. Calls for a standardised EU valuation method providing safe harbour rules to determine share and stock option value in non-listed companies, preventing retroactive reassessments and reducing legal uncertainty; considers that such valuations should be recognised by participating tax administrations unless abuse, fraud or manifest error is demonstrated;

Added40. Recalls that social security contributions and pension income taxes applicable to workers carrying out their activities in more than one Member State are set by the multi-state worker framework under Article 13 of Regulation (EC) No 883/200416, whereby the applicable legislation is determined in accordance with a number of factors, thereby enhancing legal certainty and reducing cross-border administrative burdens;

Added41. Calls for targeted rules to ensure tax certainty for employees who move between Member States, during the period between the granting of employee equity and the sale of the underlying shares, including through streamlined one-stop digital employer reporting as well as the avoidance of double or multiple taxation at the point of sale of employee equity; stresses that any allocation of taxing rights should remain proportionate, simple and predictable;

Transfer pricing

Change 11

Removed22. Stresses that transfer pricing complexity, in the absence of formulary apportionment, must be substantially reduced – safe harbours should apply to routine intra-group services and low-risk transactions, harmonised approaches should apply to intellectual property licensing and cost allocation should limit disputes;

Added42. Regrets that although all Member States have national legislation in line with OECD transfer pricing guidelines, the application of those guidelines remains divergent due to the absence of an EU transfer pricing directive; stresses that in order to prevent compliance costs from becoming a structural barrier to expansion, transfer pricing complexity should be substantially reduced; considers that there is a need to draw on elements of the CCCTB to provide a coherent basis for a unified European tax framework; proposes, within the tax module, that the Commission should clearly specify the transfer pricing rules applicable to companies opting into the 28th regime, and include coordinated safe harbours which should apply to routine intra-group services and low-risk transactions, and harmonised approaches that should apply to intellectual property licensing and cost allocation to limit disputes, while documentation requirements should be proportionate to company size and growth stage;

Access to capital

Change 12

Changed23.43. Calls for uniformthe harmonisation of capital gains treatmentdefinitions and automatic double taxation relieftreatment, toas reducewell cross-borderas uncertainty;efficient callsmechanisms for the establishmentprevention of adouble genuinetaxation EU-wideand investorto passportreduce tocross-border eliminateuncertainty; suggests an assessment of the duplicationpossibility of nationalestablishing supervisorya requirements;single stressesdigitally thatverified thisstatus passportof mustinvestors servebased ason a single,set digitallyof verifiedcommon statusstandards, thatto ensuresensure anthat investor’stheir eligibility is automatically recognised across all Member States;States in order to ease cross-border investments; is of the opinion that standardised investment instruments, including harmonised, convertible financing templates and model shareholder agreements, mustshould be introduced to reduce transaction costs;costs and legal uncertainty, while strengthening investor protection and market transparency;

Change 13

Added44. Stresses that one of the goals of the new regime is to contribute to the development of a genuine EU capital market, enabling firms under its scope to obtain the necessary funding while maintaining their presence in the EU; underscores therefore the need to mobilise the high volume of savings in the EU towards the aforementioned investments, in particular by developing attractive and accessible investment products for retail investors, while preventing the risk of such savings being channelled towards non-EU jurisdictions; stresses that the tax module must facilitate the closing of the current funding gap in the EU;

Added45. Emphasises that the 28th regime should directly address structural obstacles that limit capital mobilisation in Europe; recalls that from an investor perspective, regulatory and prudential alignment must be ensured; considers that the 28th regime should contain harmonised rules on equity-like debt instruments, including insolvency rules linked to those instruments, enabling investors to invest in a company without acquiring rights of control over that company;

Tax incentives