COMMISSION PROPOSAL PACKAGE TO SIMPLIFY TAX RULES FOR CROSS-BORDER BUSINESSES
The European Commission has introduced the “Business in Europe: Framework for Income Taxation” (BEFIT), a reformative set of initiatives designed to streamline tax compliance for large, multinational corporations within the EU. BEFIT's unified rule set for calculating the tax base aims to significantly diminish the administrative burden and compliance costs for businesses, with potential reductions of up to 65%.
The BEFIT framework emerges as part of the EU's broader alignment with the OECD/G20's global tax standards, specifically the international consensus on minimum taxation levels and the Pillar Two Directive. The initiative is expected to level the playing field for European businesses and stimulate cross-border investment by mitigating the complexities of navigating 27 different national tax systems.
Accompanying these changes, the Commission also proposes the harmonization of transfer pricing rules within the EU to enhance tax certainty, minimize litigation and double taxation risks, and curb aggressive tax planning. These proposed measures, subject to adoption by the Council, are scheduled to take effect on 1st July 2028 for BEFIT and 1st January 2026 for the transfer pricing directive.
Source: DG TAXUD