Annexes to COM(2023)532 - Business in Europe: Framework for Income Taxation (BEFIT) - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)532 - Business in Europe: Framework for Income Taxation (BEFIT). |
|---|---|
| document | COM(2023)532 |
| date | September 12, 2023 |
1.5.4. Compatibility with the Multiannual Financial Framework and possible synergies with other appropriate instruments
In the Commission Communication on Business Taxation in the 21st Century the Commission committed to table a legislative proposal setting out union rules for Business in Europe: Framework for Income Taxation (BEFIT). Where possible, the Proposal will make use the procedures, arrangements and IT tools already established or under development under the DAC.
1.5.5. Assessment of the different available financing options, including scope for redeployment
Implementation costs for the initiative will be financed by the EU budget concerning only the central components for the BEFIT collaborative tool. This will be financed through redeployments from within the Fiscalis envelope. Otherwise, it will be for Member States to implement the measures envisaged.
1.6. Duration and financial impact of the proposal/initiative
limited duration
- in effect from [DD/MM]YYYY to [DD/MM]YYYY
1. Financial impact from YYYY to YYYY for commitment appropriations and from YYYY to YYYY for payment appropriations.
unlimited duration
- Implementation with a start-up period from YYYY to YYYY,
1. followed by full-scale operation.
1.7. Method(s) of budget implementation planned38
Direct management by the Commission
- by its departments, including by its staff in the Union delegations;
2. by the executive agencies
Shared management with the Member States
Indirect management by entrusting budget implementation tasks to:
- third countries or the bodies they have designated;
3. international organisations and their agencies (to be specified);
- the EIB and the European Investment Fund;
4. bodies referred to in Articles 64 and 65 of the Financial Regulation;
- public law bodies;
5. bodies governed by private law with a public service mission to the extent that they are provided with adequate financial guarantees;
- bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that are provided with adequate financial guarantees;
6. bodies or persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.
- If more than one management mode is indicated, please provide details in the ‘Comments’ section.
Comments
As regards the BEFIT collaborative tool which will facilitate the operation and communication of BEFIT teams, the Commission is responsible for the development and operation of such a tool. Member States will undertake to create the appropriate domestic infrastructure that will enable the communication of the information between members of BEFIT teams through the BEFIT collaborative tool.
2. MANAGEMENT MEASURES
2.1. Monitoring and reporting rules
Specify frequency and conditions.
The Commission will continuously monitor the effectiveness and efficiency of the Proposal, using the following pre-defined indicators: implementation and first BEFIT running costs; number of groups of companies in the mandatory scope of the proposal, as well as the number of companies that voluntarily opted in; evolution of the compliance costs of both large groups and SMEs in the EU; and the number of double taxation disputes.
In addition, the Commission will review the situation in the Member States regularly and publish a report. The monitoring framework will be subject to further adjustments in accordance with the final legal and implementation requirements and timeline.
An evaluation will take place five years after the implementation of the Proposal which will allow the Commission to review the results of the policy with respect to its objectives as well as the overall impacts in terms of tax revenue, businesses and the internal market.
2.2. Management and control system(s)
2.2.1. Justification of the management mode(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed
The implementation of the Proposal will rely on the competent authorities (tax administrations) of the Member States. They will be responsible for financing their own national systems and adaptations necessary to enable the communication of the information between members of BEFIT teams through the BEFIT collaborative tool.
The Commission will set up the infrastructure, the BEFIT collaborative tool, that will facilitate the operation and communication of BEFIT teams. The BEFIT collaborative tool will thus be implemented in direct management mode given the nature of the infrastructure required for the BEFIT teams, explained above. The Commission is best placed to provide this. There is no need for indirect management. Under shared management, each Member would develop its own tool, which would not be practical, especially because there would be many BEFIT teams connecting many different combinations of Member States. At Commission level, IT systems have been set up which will be used for this Proposal. The Commission will be financing the development of this BEFIT collaborative tool, as well as the hosting, content management, encryption, and annual maintenance of the tool.
2.2.2. Information concerning the risks identified and the internal control system(s) set up to mitigate them
No risks have been identified as the BEFIT collaborative tool will be a new infrastructure and therefore has no precedent. The internal control system will rely on the systems in place for existing funding programmes under the direct management of DG TAXUD (e.g. Fiscalis). As such this should not result in additional risks.
The overall internal control system in place at DG TAXUD for procurements (based upon thorough ex-ante verification of 100% of the related transactions), allowed keeping the error rates for previous funding programmes (e.g. Fiscalis) well below the materiality threshold (i.e. at an estimated level of 0,5%). This control system will also be used and applied for the BEFIT collaborative tool thus ensuring error rates well below the materiality threshold.
The main elements of the control strategy are:
Procurement contracts
The control procedures for procurement defined in the Financial Regulation: any procurement contract is established following the established procedure of verification by the services of the Commission for payment, taking into account contractual obligations and sound financial and general management. Anti-fraud measures (controls, reports, etc.) are foreseen in all contracts concluded between the Commission and the beneficiaries. Detailed terms of reference are drafted and form the basis of each specific contract. The acceptance process follows strictly the TAXUD TEMPO methodology: deliverables are reviewed, amended if necessary and finally explicitly accepted (or rejected). No invoice can be paid without an "acceptance letter".
Technical verification of procurement
DG TAXUD performs controls of deliverables and supervises operations and services carried out by contractors. It also conducts quality and security audits of their contractors on a regular basis. Quality audits verify the compliance of the contractors' actual processes against the rules and procedures defined in their quality plans. Security audits focus on the specific processes, procedures and set-up.
In addition to the above controls, DG TAXUD performs the traditional financial controls:
Ex-ante verification of commitments
All commitments in DG TAXUD are verified by the Head of the Finances and the HR business correspondent Unit. Consequently, 100% of the committed amounts are covered by the ex-ante verification. This procedure gives a high level of assurance as to the legality and regularity of transactions.
Ex-ante verification of payments
100% of payments are verified ex-ante. Moreover, at least one payment (from all categories of expenditures) per week is randomly selected for additional ex-ante verification performed by the head of the Finances and HR business correspondent Unit. There is no target concerning the coverage, as the purpose of this verification is to check payments "randomly" in order to verify that all payments were prepared in line with the requirements. The remaining payments are processed according to the rules in force on a daily basis.
Declarations of the Authorising Officers by Sub-Delegations (AOSD)
All the AOSD sign declarations supporting the Annual Activity Report for the year concerned. These declarations cover the operations under the programme. The AOSD declare that the operations connected with the implementation of the budget have been executed in accordance with the principles of the sound financial management, that the management and control systems in place provided satisfactory assurance concerning the legality and regularity of the transactions and that the risks associated to these operations have been properly identified, reported and that mitigating actions have been implemented.
2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of error (at payment & at closure)
The controls established enable DG TAXUD to have sufficient assurance of the quality and regularity of the expenditure and to reduce the risk of non-compliance. The above control strategy measures reduce the potential risks below the target of 2% and reach all beneficiaries. Any additional measures for further risk reduction would result in disproportionately high costs and are therefore not envisaged. The overall costs linked to implementing the above control strategy – for all expenditures under Fiscalis programme – are limited to 1.6% of the total payments made. It is expected to remain at the same ratio for this initiative. The programme control strategy limits the risk of non-compliance to virtually zero and remains proportionate to the risks entailed.
2.3. Measures to prevent fraud and irregularities
Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.
The European Anti-fraud Office (OLAF) may carry out investigations, including on-the-spot checks and inspections, in accordance with the provisions and procedures laid down in Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom, EC) No 2185/964 with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union in connection with a grant agreement or decision or a contract funded under this Regulation.
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s) affected
1. Existing budget lines
In order of multiannual financial framework headings and budget lines.
| Heading of multiannual financial framework | Budget line | Type of expenditure | Contribution | |||
| Diff./Non-diff.39 | from EFTA countries40 | from candidate countries and potential candidates41 | fromother third countries | other assigned revenue | ||
| 1 - Single Market, Innovation and Digital | 03 04 01 Cooperation in the field of taxation (Fiscalis) | Diff | NO | NO | NO | NO |
3.2. Estimated financial impact of the proposal on appropriations
3.2.1. Summary of estimated impact on operational appropriations
- The proposal/initiative does not require the use of operational appropriations
2. The proposal/initiative requires the use of operational appropriations, as explained below:
EUR million (to three decimal places)
| Heading of multiannual financial framework | Number 1 | Single Market, Innovation and Digital |
| DG: TAXUD | 202542 | 2026 | 2027 | TOTAL | ||||||||||
| □ Operational appropriations | ||||||||||||||
| 03 04 01 Cooperation in the field of taxation (Fiscalis) | Commitments | (1a) | 0,6 | 0,6 | . | . | . | |||||||
| Payments | (2a) | 0,3 | ||||||||||||
| Appropriations of an administrative nature financed from the envelope of specific programmes43 | ||||||||||||||
| TOTAL appropriations for DG TAXUD | Commitments | =1a+1b +3 | 0,6 | 0,6 | ||||||||||
| Payments | =2a+2b +3 | 0,3 | ||||||||||||
| □ TOTAL operational appropriations | Commitments | (4) | 0,6 | 0,6 | 0,6 | |||||||||
| Payments | (5) | 0,3 | ||||||||||||
| □ TOTAL appropriations of an administrative nature financed from the envelope for specific programmes | (6) | |||||||||||||
| TOTAL appropriations under HEADING <….> of the multiannual financial framework | Commitments | =4+ 6 | 0,6 | 0,6 | 0,6 | |||||||||
| Payments | =5+ 6 | 0,3 |
| Heading of multiannual financial framework | 7 | ‘Administrative expenditure’ |
This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative Financial Statement (Annex 5 to the Commission decision on the internal rules for the implementation of the Commission section of the general budget of the European Union), which is uploaded to DECIDE for interservice consultation purposes.
EUR million (to three decimal places)
| Year N | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | TOTAL | ||||
| DG: <…….> | |||||||||
| □ Human resources | |||||||||
| □ Other administrative expenditure | |||||||||
| TOTAL DG <…….> | Appropriations |
| TOTAL appropriations under HEADING 7 of the multiannual financial framework | (Total commitments = Total payments) |
EUR million (to three decimal places)
| Year N44 | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | TOTAL | ||||
| TOTAL appropriations under HEADINGS 1 to 7 of the multiannual financial framework | Commitments | ||||||||
| Payments |
3.2.2. Estimated output funded with operational appropriations
Commitment appropriations in EUR million (to three decimal places)
| Indicate objectives and outputs | 2025 | 2026 | 2027 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | TOTAL | |||||||||||||
| OUTPUTS | ||||||||||||||||||
| Type45 | Average cost | No | Cost | No | Cost | No | Cost | No | Cost | No | Cost | No | Cost | No | Cost | Total No | Total cost | |
| SPECIFIC OBJECTIVE No 146… | ||||||||||||||||||
| - Hosting and support | 0,6 | 0,6 | 0,6 | |||||||||||||||
| - Output | ||||||||||||||||||
| - Output | ||||||||||||||||||
| Subtotal for specific objective No 1 | 0,6 | 0,6 | 0,6 | |||||||||||||||
| SPECIFIC OBJECTIVE No 2 ... | ||||||||||||||||||
| - Output | ||||||||||||||||||
| Subtotal for specific objective No 2 | ||||||||||||||||||
| TOTALS | 0,6 | 0,6 | 0,6 |
3.2.3. Summary of estimated impact on administrative appropriations
- The proposal/initiative does not require the use of appropriations of an administrative nature
- The proposal/initiative requires the use of appropriations of an administrative nature, as explained below:
EUR million (to three decimal places)
| Year N 47 | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | TOTAL |
| HEADING 7 of the multiannual financial framework | ||||||||
| Human resources | ||||||||
| Other administrative expenditure | ||||||||
| Subtotal HEADING 7 of the multiannual financial framework |
| Outside HEADING 748 of the multiannual financial framework | ||||||||
| Human resources | ||||||||
| Other expenditure of an administrative nature | ||||||||
| Subtotal outside HEADING 7 of the multiannual financial framework |
| TOTAL |
The appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.
3.2.3.1. Estimated requirements of human resources
- The proposal/initiative does not require the use of human resources.
3. The proposal/initiative requires the use of human resources, as explained below:
Estimate to be expressed in full time equivalent units
| 2025 | 2026 | 2027 | ||||||||
| □ Establishment plan posts (officials and temporary staff) | ||||||||||
| 20 01 02 01 (Headquarters and Commission’s Representation Offices) | 0,2 | 0,1 | 0,1 | |||||||
| 20 01 02 03 (Delegations) | ||||||||||
| 01 01 01 01 Indirect research) | ||||||||||
| 01 01 01 11 (Direct research) | ||||||||||
| Other budget lines (specify) | ||||||||||
| □ External staff (in Full Time Equivalent unit: FTE)49 | ||||||||||
| 20 02 01 (AC, END, INT from the ‘global envelope’) | ||||||||||
| 20 02 03 (AC, AL, END, INT and JPD in the delegations) | ||||||||||
| XX 01 xx yy zz50 | - at Headquarters | |||||||||
| - in Delegations | ||||||||||
| 01 01 01 02 (AC, END, INT - Indirect research) | ||||||||||
| 01 01 01 12 (AC, END, INT - Direct research) | ||||||||||
| Other budget lines (specify) | ||||||||||
| TOTAL | 0,2 | 0,1 | 0,1 |
The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.
Description of tasks to be carried out:
| Officials and temporary staff | Business Manager for the BEFIT Collaborative Tool |
| External staff |
3.2.4. Compatibility with the current multiannual financial framework
The proposal/initiative:
- can be fully financed through redeployment within the relevant heading of the Multiannual Financial Framework (MFF).
The operational expenditure will be financed from within the foreseen envelope for the Fiscalis programme, under MFF Heading 1.
- requires use of the unallocated margin under the relevant heading of the MFF and/or use of the special instruments as defined in the MFF Regulation.
- requires a revision of the MFF.
3.2.5. Third-party contributions
The proposal/initiative:
- does not provide for co-financing by third parties
4. provides for the co-financing by third parties estimated below:
Appropriations in EUR million (to three decimal places)
| Year N51 | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | Total | |||
| Specify the co-financing body | ||||||||
| TOTAL appropriations co-financed |
3.3. Estimated impact on revenue
- The proposal/initiative has no financial impact on revenue.
5. The proposal/initiative has the following financial impact:
a. on own resources
a. on other revenue
b. please indicate, if the revenue is assigned to expenditure lines ◻
EUR million (to three decimal places)
| Budget revenue line: | Appropriations available for the current financial year | Impact of the proposal/initiative52 | ||||||
| Year N | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | ||||
| Article …………. |
For assigned revenue, specify the budget expenditure line(s) affected.
[…]
Other remarks (e.g. method/formula used for calculating the impact on revenue or any other information).
[…]
1
COM(2021) 251 final
2
COM(2022) 548 final
3
COM(2021) 566 final
4
COM(2011) 121/4 final.
5
COM(2016) 685 final; COM(2016) 683 final.
6
Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources.
7
Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy – 8 October 2021, OECD/G20 Base Erosion and Profit Shifting Project.
8
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 Union (OJ L 328, 22.12.2022, p. 1)
9
Proposal for a COUNCIL DIRECTIVE on laying down rules on a debt-equity bias reduction allowance and on limiting the deductibility of interest for corporate income tax purposes, COM/2022/216 final.
10
Proposal for a COUNCIL DIRECTIVE laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/EU, COM/2021/565 final.
11
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 States (recast) (OJ L 345, 29.12.2011, p. 8)
12
Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States (OJ L 157, 26.6.2003, p. 49)
13
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 States.
14
Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1)
15
Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 146, 3.6.2016, p. 8).
16
Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (OJ L 193, 19.7.2016, p. 1)
17
OECD/G20 Base Erosion and Profit Shifting Project Outcome Statement on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy of 11 July 2023
18
Call for evidence for an impact assessment - Ares(2022)7086603.
19
Ares(2023)3669156, 26 May 2023.
20
Charter of Fundamental Rights of the European Union, OJ C 326, 26.10.2012, p. 391.
21
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (Text with EEA relevance) (OJ L 119, 4.5.2016, p. 1)
22
OJ C , , p. .
23
OJ C , , p. .
24
Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy – 8 October 2021, OECD/G20 Base Erosion and Profit Shifting Project.
25
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 Union (OJ L 328, 22.12.2022, p. 1.)
26
Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making (OJ L 123, 12.5.2016, p. 1).
27
Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).
28
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1).
29
Regulation (EU) 2018/1724 of the European Parliament and of the Council of 2 October 2018 establishing a single digital gateway to provide access to information, to procedures and to assistance and problem-solving services and amending Regulation (EU) No 1024/2012 (OJ L 295, 21.11.2018, p. 1).
30
Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (OJ L 243, 11.9.2002, p. 1)
31
Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1).
32
Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (OJ L 193, 19.7.2016, p. 1)
33
Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (OJ L 374, 31.12.1991, p. 7)
34
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 States (OJ L 310, 25.11.2009, p. 34)
35
Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1)
36
Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ L 55, 28.2.2011, p. 13)
37
As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
38
Details of budget implementation methods and references to the Financial Regulation may be found on the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-implementation/Pages/implementation-methods.aspx
39
Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
40
EFTA: European Free Trade Association.
41
Candidate countries and, where applicable, potential candidates from the Western Balkans.
42
The year in which implementation of the proposal/initiative starts is unknown. As such the year 2025 is taken as an assumption.
43
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.
44
Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same for the following years.
45
Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).
46
As described in point 1.4.2. ‘Specific objective(s)…’
47
Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same for the following years.
48
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.
49
AC= Contract Staff; AL = Local Staff; END= Seconded National Expert; INT = agency staff; JPD= Junior Professionals in Delegations.
50
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).
51
Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same for the following years.
52
As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net amounts, i.e. gross amounts after deduction of 20 % for collection costs.
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