Commission announces three new sources of taxation revenue

Article summary

The European Commission has announced three new sources of taxation that will raise up to €17bn annually between 2026 to 2030. The first source of taxable revenue would derive from emission trading (ETS), the second from the carbon border adjustment mechanism, and the third from the share of residual profits from multinationals reallocated to EU Member States. The Commission expects that this revenue will pay for the grant component of the NextGenerationEU funds raised by the EU, as well as pay for future funds, such as the Social Climate Fund, which is an essential part of the Emissions Trading System. The Commission is expected to present a second batch of sources of taxation by the end of 2023, building on the ‘Business in Europe: Framework for Income Taxation (BEFIT)’ proposal which is expected in 2023.