EU eyes new corporate tax to boost budget revenues amid rising spending demands
&imwidth=600&imheight=450&format=webp&quality=medium "EU eyes new corporate tax to boost budget revenues amid rising spending demands")
European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium June 17, 2022. Photograph: (Reuters)
The measure, still under internal discussion, is part of a broader push to diversify the EU’s sources of income as it faces rising expenditure demands, from defence and climate initiatives to mounting debt interest.
The European Commission is set to unveil a sweeping proposal next week that would impose a new tax on large companies operating within the EU, aiming to secure fresh independent revenue streams for the bloc’s €1 trillion-plus ($1.16 billion) common budget. According to a draft proposal seen by the Financial Times, the so-called “corporate resource for Europe” would target companies with annual net turnover exceeding €50 million ($58.4 million), regardless of where they are headquartered.
The measure, still under internal discussion, is part of a broader push to diversify the EU’s sources of income as it faces rising expenditure demands, from defence and climate initiatives to mounting debt interest. The proposed levy would use a bracket system, with companies generating the highest revenues contributing more. If adopted, this tax would apply uniformly to all qualifying firms across the 27-member bloc, a move that could include multinational giants from the US, China, and other non-EU countries.
However, implementation remains uncertain. The tax would require unanimous approval from all EU member states, a high bar that has thwarted previous efforts to introduce bloc-wide taxes, such as the long-shelved financial transaction tax or a digital services levy aimed at Big Tech. The current draft appears to drop earlier proposals for a targeted digital services tax, a concession likely made to avoid further tensions with the US, where President Donald Trump has sharply criticised the EU’s approach to regulating American tech firms.
Additional levies on e-waste, tobacco under consideration
In addition to the corporate tax, the Commission is also weighing several other revenue-generating measures, including a levy on non-recycled electronic waste, a share of increased tobacco excise duties, and a handling fee on long-distance e-commerce packages—a charge expected to disproportionately affect imports from China.
The proposal, due to be officially announced alongside the EU’s next seven-year budget plan, includes placeholders for some financial details, indicating internal negotiations are still underway. A Commission spokesperson declined to comment on the specifics of the draft, noting that the content remains subject to change.
Trending Stories
&im=FitAndFill=(700,400))
)
)
)
)
&im=FitAndFill=(700,400))
)
)
)
)
)
)
)
&im=FitAndFill=(700,400))
)
)
)
)
)
)
)
&im=FitAndFill=(700,400))
)
&im=FitAndFill=(700,400))
)
Brussels argues the need for new, stable revenue sources is growing urgent. The EU’s budget, traditionally funded largely by national contributions and a few independent revenue streams like customs duties and VAT, is under pressure as spending rises sharply. Existing levies such as the emissions trading system and the upcoming carbon border adjustment mechanism—expected to generate €1.5 billion (1.75 billion) annually starting in 2026—will also be reviewed and possibly expanded.
Yet political resistance looms large. Countries like Germany, the Netherlands, Austria, and Sweden have historically opposed efforts to increase the EU budget or introduce new EU-level taxes. Corporate Europe is also likely to push back, especially amid slow economic growth and high energy costs.