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European Commission launches COVID recovery package, considers new taxes
On 27 May, the European Commission published its long-awaited COVID recovery plan to help rebuild Europe’s economy. It includes a one-off EUR 750 billion recovery instrument to help finance member states’ economies that have been weakened by the ongoing pandemic. Of this, EUR 500 billion would be in the form of grants, and EUR 250 billion in loans.
Interestingly, the Commission intends to consider several tax measures as options to help finance the recovery funding:
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A carbon border tax
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An “own resource based on the operation of large companies” – dubbed a “Single Market tax” that could yield up to EUR 10 billion
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A digital tax based on OECD’s work or EU’s own action if OECD fails. According to initial estimates, a tax on large digital companies like Facebook and Google could generate about EUR 1 billion annually
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Simplified VAT
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A plastics tax that is expected to yield up to EUR 7 billion.
The Commission also commits to stepping up the fight against “tax fraud and other unfair practices”, and underlines the potential benefits of a common consolidated corporate tax base (CCCTB).
Beyond the references above, the Commission’s package did not include any tax proposals as such, but they do give indications to what is to be expected from the 15 July tax package as well as any subsequent tax initiatives.
Accountancy Europe
© Accountancy Europe
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