The European Commission (EC) unveiled a new tax simplification package on Wednesday, which is expected to save EU businesses €8 billion a year, including €3.3 billion in administrative costs.
The two proposed laws aim to cut red tape in an overall effort to make Europe a more attractive place for businesses to thrive.
“By removing prior procedural requirements and simplifying reimbursement processes, the measure will facilitate financing, encourage investment and increase competitiveness”the Commission said in a statement.
The biggest measure proposed in the package is the exemption from withholding tax for all cross-border payments of dividends, interest and royalties between EU companies.
“This measure alone should bring EU taxpayers savings and benefits of around 5.3 billion euros per year,” said the statement.
In addition, the package will introduce a common minimum standard for the tax treatment of research and development investments to make Europe more attractive for investment. The Commission estimates that this could increase EU GDP by around 0.2 percent per year.
The framework is another step in the bloc’s ongoing efforts to improve the EU’s economic competitiveness, something Commission President Ursula von der Leyen has made a top priority.
It will now be up to the European Parliament and member states in the European Council to continue negotiations on the new proposal.
Once the two co-legislators approve their positions on the package, the three institutions can start inter-institutional negotiations and work towards a common text.
