Directive Proposal on BEFIT: A real necessity or just another layer of useless complexity?

On 12 September, the EU Commission adopted a key package of initiatives containing notably a Directive Proposal on Business in Europe: Framework for Income Taxation (“BEFIT”). BEFIT is one of the initiatives announced by the European Commission in its May 2021 communication on Business Taxation for the 21st Century and aims to “introduce a common set of rules for EU companies to calculate their taxable base while ensuring a more effective allocation of profits between EU countries, based on a formula”.

The Directive Proposal on BEFIT replaces and thus repeals the EU Commission’s proposal for a common corporate tax base (“CCTB”) and the proposal for a common consolidated corporate tax base (“CCCTB”) that have never reached consensus.

In this article, Tax Partner, Oliver R. Hoor, and Chief Knowledge Officer, Marie Bentley, analyse the Directive Proposal on BEFIT and comment on its implications.