“By eliminating procedural requirements, this measure will make it easier to raise funds, stimulate investment, and boost competitiveness,” Euronews quotes the commission as saying.
A key element of the package is the exemption from withholding tax on all cross-border payments of dividends, interest, and royalties between companies within the EU. This measure alone is expected to yield annual savings of 5.3 billion euros, the document notes.
In addition, a uniform minimum standard for the tax treatment of investments in research and development is being introduced. This could increase the EU’s GDP by approximately 0.2% annually.
A 25% –35%Reduction inthe Administrative Burden
At the start of its term, the Commission pledged to reduce the administrative burden on businesses by 25% by 2029, and by at least 35% for small and medium-sized enterprises. This is expected to result in annual cost savings of at least 37.5 billion euros by 2029.
BusinessEurope, an association representing 42 national employers’ federations, welcomed the new proposals. The organization’s Director General, Markus J. Bayerer spoke positively about the abolition of withholding tax, as well as the reduction of “duplicative compliance checks for companies that are already subject to the global minimum tax, and the exemption of small companies from rules designed for large multinational corporations.”
The initiative will now be taken up by the European Parliament and the member states in the Council of the EU, which are set to begin negotiations on the new proposal. Afterward, it will be possible to begin negotiations and work toward agreeing on a common text.
