### e. whereas tax administrations across europe , within different degrees , are taking important steps towards the digitalisation of processes , making tax compliance easier , faster and more effective; whereas the use of new technologies is significantly different between member states; whereas national tax administrations , in general , need a further push to realise the potential in the field of technological and digital transformation; ### e. whereas tax administrations across europe , within different degrees , are taking important steps towards the digitalisation of processes , making tax compliance easier , faster and more effective; whereas the use of new technologies is significantly different between member states; whereas national tax administrations , in general , need a further push to realise their full potential in the field of technological and digital transformation; whereas technology can help facilitating cooperation between the different government bodies: customs , tax , social security , financial intelligence units , ministry of justice , and ministry of finance achieving a whole of government approach;


### f. whereas the increasing use of crypto-assets is forcing tax administrations to adapt current taxing practices within the single market; ### f. whereas the increasing use of crypto-assets pose a significant risk to recent gains in global tax transparency as crypto-asset activity has reduced tax administrations’ visibility on tax- relevant activities and therefore calls for tax administrations to engage in cross-border collaboration and coordination;


### g. whereas there is an international effort and commitment to better regulate the fair taxation of the digital economy; whereas , in this context , it is crucial that the eu take a leading role , namely on strong cooperation between member states to tax , in a fair and transparent way , crypto-assets; ### g. whereas equivalent to other tangible and intangible assets , crypto-assets need to be subject to taxation in the eu , tax competition leading inevitably to a race to the bottom between member states should be avoided and curtailed;


### h. whereas the union has already taken important steps towards a clear definition of crypto-assets and this definition must facilitate the fair and simple taxation of these assets; and whereas definitions of such crypto-assets must be highly aligned with international standards , namely with the financial action task force; ### h. whereas the union has already taken important steps towards a clear definition of crypto-assets and this definition must facilitate the fair and simple taxation of these assets; and whereas definitions of such crypto-assets must be aligned with international standards , namely the oecd and the financial action task force;


### i. whereas tax policy is a national competence , but strong cooperation between member states is essential to respond to the challenges posed to the integrity of the single market , namely by the increasing the use of crypto-assets; whereas a framework of 27 significantly different approaches to crypto-assets taxation could lead to significant obstacles for the fulfilment of the objectives of the european digital single market; ### i. whereas strong cooperation and where needed harmonisation between member states is essential to respond to the challenges posed to the integrity of the single market and the sustainability of tax systems by the increasing the use of crypto-assets; whereas a framework of 27 significantly different taxation approaches to crypto-assets would be highly undesirable;


### j. whereas the european union and its single market must ensure an innovation-friendly environment for companies (namely small and medium-sized enterprises (smes) and start-ups) regarding new technologies in the area of financial services and crypto-assets; whereas this main goal requires a strong commitment from member states with policies , namely on taxation , that ensure a stable , clear and certain legal framework for businesses to thrive and contribute to economic growth; whereas , finally , this effort requires strong commitment to safeguard citizens’ rights , as taxpayers and consumers of financial services; ### j. whereas future legislative proposals in the area of the taxation of crypto-assets and the utilisation of new technologies should ensure a stable , clear and certain legal framework for citizens and businesses to thrive and contribute to sustainable prosperity; whereas , finally , this effort requires strong commitment to safeguard citizens’ rights , as taxpayers and consumers of financial services;


### 1. considers that national tax administrations should be better equipped with the adequate resources to better serve taxpayers and ensure compliance and that , in the context of digital transition , this means proper commitment from member states with investment in human resources training , digital infrastructures and specialised personnel and equipment; ### 1. considers that national tax administrations should be better equipped with the adequate resources to collect revenues , enforce rules , facilitate taxpayers and ensure compliance; calls on member states to commit , in light of the increased challenges of the digital transition; to invest more in human resources , training , digital infrastructures and specialised personnel and equipment;


### 2. points out that adapting the it capacities of tax authorities through new emerging technologies , such as potential distributed ledger technologies like blockchain or artificial intelligence , promises to foster intelligent , effective and efficient tax and administrative procedures , facilitate tax compliance by citizens and businesses , and increase the traceability and identification of taxable transactions in a globalised environment where cross-border transactions have increased; ### 2. points out that adapting the it capacities of tax authorities through new emerging technologies , such as distributed ledger technologies like blockchain or artificial intelligence , promises to foster intelligent , effective and efficient tax and administrative procedures , facilitate tax compliance by citizens and businesses , increase the traceability and identification of taxable transactions and ownership of tangible and intangible assets , especially above a certain threshold , in a globalised environment , and creates opportunities for better and fairer designed tax systems to tax equally mobile taxpayers and assets;


### 3. highlights the need to identify the best ways to use technology to strengthen the analytical capacity of tax administrations (through better data analysis) , to standardise data to reduce administrative burdens on smes , to ensure that taxation better reflects the business environment in the digital age and at the same time guarantees high levels of data protection; ### 3. highlights the need to identify the best ways to use technology to strengthen the analytical capacity of tax administrations (through better data analysis) , to standardise data to reduce administrative burdens on smes and citizens , to ensure that taxation better reflects the business environment in the digital age and at the same time guarantees high levels of data protection;


### 4. calls on the commission to promote an assessment of the different national policies regarding the combat against tax fraud and evasion in the field of crypto-assets , underlining best practices and potential loopholes , and taking advantage of cooperation platforms in the field of taxation , namely the fiscalis programme; ### 4. calls on the commission to promote an assessment of the different national policies regarding the combat against tax fraud and evasion in the field of crypto-assets , underlining best practices and potential loopholes , and taking advantage of cooperation platforms in the field of taxation , namely the fiscalis programme; calls on the commission and the code of conduct to tackle harmful tax practices in the area of crypto-assets in the eu leading to a race to the bottom;


### 6. invites the commission to continue evaluating the operational impact and tax governance aspects of blockchain technology , notably through the fiscalis programme; ### 6. invites the commission to continue evaluating the operational impact and tax governance aspects of blockchain technology , notably through the fiscalis programme; notes that for blockchain technology to be effective a certain level of harmonisation of the underlying rules is needed;


### 7. considers that crypto-assets must be subject to fair , transparent and effective taxation , in order to guarantee fair competition between businesses in the area of financial services; understands that decisions on the taxation of crypto-assets lie with member states , according to the treaties; stands for an innovation-friendly environment in the digital single market , where entrepreneurs , smes and start-ups can thrive , generate growth , create jobs and contribute to economic recovery through tax revenues; ### 7. considers that crypto-assets must be subject to fair , transparent and effective taxation , in order to guarantee a level playing field between the tax treatment of assets and financial products and between financial services providers; invites authorities to consider a simplified tax treatment for occasional or small traders and small transactions; stands for an innovation-friendly environment in the digital single market , where entrepreneurs , smes and start-ups can thrive , generate growth , create jobs and contribute to economic recovery through tax revenues;


### 8. acknowledges that the definition of the tax base for crypto-assets is one of the core issues for tax policy; notes that there is currently no internationally-agreed standard definition of crypto-assets and types of assets to be included; understands the need for such a definition as a main priority in the european legislative framework in order to guarantee a leading position for the union at international level; ### 8. acknowledges that the definition of the tax base for crypto-assets is one of the core issues for tax policy; notes that there is currently no internationally-agreed standard definition of crypto-assets and types of assets to be included; understands the need for such a definition as amain priority in the european legislative framework; understand the oecd ,mandated by the g20 , is working on a new global tax transparency framework to provide for the reporting and exchange of information with respect to crypto-assets;


### 9. notes that each country tends to use their own terminology when designing their national regulatory solutions to crypto-assets , which could cause legal uncertainty for citizens and companies , at the same time emerge as a threat to the integrity of the european single market; ### 9. notes that each country tends to use their own terminology when designing their national regulatory solutions to crypto-assets ,which could cause legal uncertainty for citizens and companies , be a threat to the integrity of the european single market , open the door to harmful tax competition in the eu and be exploited to undermine existing international tax transparency such as the common reporting standard;


### 10. emphasises that the rapid growth of crypto-assets4 refers to the key question of the type of taxation to be applied , when a taxable event happens , and its valuation; ### 10. emphasises that the rapid growth of crypto-assets4 makes it urgent to have rules in place defining the type of taxation to be applied , when a taxable event happens , and its valuation;


### 12. calls on the commission to consider the dimension of crypto-assets in the planned proposals for corporate taxation legal instruments , namely the business in europe: framework for income taxation; ### 12. calls on the commission to consider the dimension of crypto-assets , digitalisation and new technologies in all its future legislative proposals in the tax field; calls on member states to ambition to lead at international level on this front;


### 13. calls on the member states to consider the dimension of crypto-assets in their national tax reforms , and to consider implementing more effective systems that ensure less compliance costs and administrative burden , but that guarantee , at the same time , the fair , transparent and effective taxation of crypto-assets; underlines the role of tax incentives and exemptions in promoting technological innovation and development; ### deleted


### 14. points out that the crypto-asset landscape is global and requires an international approach; understands , in this regard , the need to further negotiate international instruments on the matter; ### 14. points out that the tax treatment of crypto-assets requires an international approach; understands , in this regard , the work lead by the oecd and the need to have a coordinated approach with the revision of the common reporting standard;


### 15. recalls that a fully integrated european single market requires a common approach on the taxation of crypto-assets , respecting competences defined by the treaties; therefore calls on the council , in its economic and financial affairs council formation , to initiate a structured dialogue with parliament on this matter; calls also on the president of the eurogroup to put forward a debate on the taxation of crypto-assets with the finance ministers of the euro area; ### 15. recalls that a fully integrated european single market requires a common approach on the taxation of crypto-assets; therefore calls on the council to initiate a structured dialogue with parliament on this matter; calls also on the president of the eurogroup to put forward a debate on the taxation of crypto-assets with the finance ministers of the euro area;


### 16. believes that it is necessary to amend the scope of the directive on administrative cooperation5 (dac8) so that european legislators can further assess if other categories of income and assets such as crypto-assets are to be included; ### 16. believes that it is necessary to amend the scope of the directive on administrative cooperation5 (dac8) to reflect the future oecd recommendations and revisions of the common reporting standards; calls on the commission to put forward a legislative proposal as soon as the oecd has finalised its work; calls on the commission to include in its future revision of dac the adopted recommendations in the european parliament’s dac implementation report; calls on the council to swiftly adopt these proposed changes;


### 17. calls on the commission and national public authorities to ensure that blockchain technology develops in compliance with the rules on the processing of personal data , on cybersecurity and on anti-money laundering/combating the financing of terrorism; ### 17. calls on the commission and national public authorities to ensure that blockchain technology used to enforce rules or provide public services complies with the rules on the processing of personal data , on cybersecurity and on anti-money laundering/combating the financing of terrorism;


### d. whereas acting within its mandate , the ecb has committed to contributing to the objectives of the paris agreement; ### d. whereas acting within its mandate , the ecb has committed to contributing to the objectives of the paris agreement; whereas climate change can hamper the effectiveness of monetary policy , affect growth , and increase price and macroeconomic instability; whereas , without strong measures , the negative impact on the eu gdp could be severe;


### 4. notes that fiscal and monetary policies have reinforced each other during the pandemic; stresses that maintaining price stability today requires even closer coordination between fiscal , monetary and structural policies , as addressing supply-side shocks requires greater supply-chain resilience and a shift away from fossil fuels; ### 4. welcomes that fiscal and monetary policies have reinforced each other during the pandemic , preventing a repetition of the experience of the global financial crisis , when inadequate support for demand resulted in low growth , high unemployment , and financial instability; agrees with vice president de guindos’ statements on 4 july 2022 that fiscal policy should do its part by delivering targeted support to vulnerable groups in the current context; notes that higher taxes on higher earners or on industries and firms that are highly profitable in spite of the energy shock constitute less inflationary pressure compared to higher deficits; stresses that maintaining price stability today requires even closer coordination between fiscal , monetary and structural policies , as addressing supply-side shocks requires greater supply-chain resilience and a shift away from fossil fuels; recognises the limit of what inflation targeting regimes can achieve at the current juncture;


### 5. welcomes president lagarde’s statement that the current geopolitical crisis requires us to progress on eu fiscal integration; recalls that the economic and monetary union cannot function smoothly without a fiscal capacity at european level to respond to external shocks; ### 5. welcomes president lagarde’s statement that the current geopolitical crisis requires us to progress on eu fiscal integration; recalls that the economic and monetary union cannot function smoothly without a fiscal capacity at european level to respond to external shocks; stresses that completion of its institutional architecture is a prerequisite to strengthening the international role of the euro; recalls that a centralised fiscal capacity could help to address the imbalances in the current economic and monetary union , in which a single monetary policy coexists with a fiscal policy that is fragmented along national lines;


### 6. echoes president lagarde’s call for a swift revision and simplification of the stability and growth pact; ### 6. echoes president lagarde’s call for a swift revision and simplification of the stability and growth pact; calls for the new framework to consider the extensive public investment needed for the energy transition , also to avoid the extreme price volatility deriving from europe’s dependence on fossil fuels;


### 8. takes note of recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; is concerned about the implications of such policy decisions for growth and employment; ### 8. takes note of recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; is concerned about the implications of such policy decisions for growth and employment; notes that earlier policy tightening by the ecb would not have been likely to prevent an energy price driven inflationary episode;


### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; ### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; notes that for the second quarter on 2022 , the growth of negotiated wage settlements came in at only 2.1 per cent;


### 10. recalls that the ecb strategy review reconfirmed the medium-term orientation of inflation targeting; calls on the ecb to faithfully target this medium-term horizon; ### 10. recalls that the ecb strategy review reconfirmed the medium-term orientation of inflation targeting; calls on the ecb to faithfully target this medium-term horizon; is concerned that following a long and careful debate on the ecb’s new monetary policy strategy , in this moment of crisis the goalposts risk shifting rather rapidly , with a sudden shift to targeting current inflation rather than the medium-term horizon that inflation targeting is thought to influence;


### 11. welcomes the ecb’s decision not to engage in quantitative tightening; ### 11. welcomes the ecb’s decision not to engage in quantitative tightening; calls on the ecb to keep this line to avoid putting further pressure on sovereign bond markets;


### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; notes the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions that are due under the pandemic emergency purchase programme; welcomes the launch of the transmission protection instrument to support the effective transmission of monetary policy across the euro area; ### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; underlines that excessive divergence in sovereign yields makes credit conditions inconsistent with the uniform transmission of monetary policy and could cause financial instability; welcomes the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions that are due under the pandemic emergency purchase programme; welcomes the launch of the transmission protection instrument to support the effective transmission of monetary policy across the euro area;


### 13. notes with concern that the combination of cheap targeted longer-term refinancing operations (tltros) and higher interest rates allow european banks to earn billions in extra profit; regrets the fact that the ecb has not yet addressed this issue; ### 13. notes with concern that the combination of cheap targeted longer-term refinancing operations (tltros) and higher interest rates allow european banks to earn billions in extra profit; regrets the fact that the ecb has not yet addressed this issue and urges the ecb to do so as a matter of urgency; stresses that it is unacceptable for the ecb to provide banks with a taxpayer-backed profit while it is raising borrowing costs for households and businesses and most commercial lenders are paying bonuses to staff and distributing dividends to investors;


### 15. calls on the ecb to coordinate with the european parliament to specify the secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on its secondary objectives; ### 15. calls on the ecb to coordinate with the european parliament to specify the secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on its secondary objectives , as suggested by president lagarde in november 2021;


### 18. reaffirms that achieving the union’s climate goals and ensuring a just transition are the top priorities of the eu’s general economic policies , which the ecb is expected to support; ### 18. reaffirms that achieving the union’s climate goals and ensuring a just transition are the top priorities of the eu’s general economic policies , which the ecb is expected to support; welcomes that the ecb is committed to supporting the green transition; recalls that this requires massive investments , a goal the ecb is well placed to support;


### 19. considers that the ecb should contribute to reducing inequality; calls on the ecb to ensure that the costs of its monetary policy operations are not disproportionately borne by lower income strata; invites the ecb to assess the effects of its monetary policy decisions on employment; ### 19. considers that the ecb should contribute to reducing inequality; calls on the ecb to ensure that the costs of its monetary policy operations are not disproportionately borne by lower income strata , also considering that wealth and income inequality negatively affect the effectiveness of monetary policy transmission; invites the ecb to assess the effects of its monetary policy decisions on employment;


### 20. stresses that addressing the climate emergency and the euro area’s dependence on fossil fuels touches not only upon the ecb’s secondary mandate , but also its primary mandate , given the serious threat these issues pose to price stability; ### 20. stresses that addressing the climate emergency and the euro area’s dependence on fossil fuels touches not only upon the ecb’s secondary mandate , but also its primary mandate , given the serious threat these issues pose to price stability; underlines that high fossil fuel prices are the major responsible for the recent strong increase in euro area inflation , reflecting “the legacy cost of the dependency on fossil energy sources , which has not been reduced forcefully enough over the past decades”;


### 21. welcomes the governing council’s decision to take further steps to include climate change considerations in the eurosystem’s monetary policy framework; ### 21. welcomes the governing council’s decision to take further steps to include climate change considerations in the eurosystem’s monetary policy framework , and specifically the decision to overcome the market neutrality principle while embracing carbon neutrality;


### 22. welcomes the ecb’s announcement to decarbonise its corporate bond holdings; calls for the ‘tilting’ of the ecb’s portfolio to be swift rather than gradual; ### 22. highlights the ecb’s acknowledgement of the carbon bias in its portfolio and the accumulation of climate risks in its balance sheet; underlines that according to available data , 62.7 % of ecb corporate bond purchases take place in the sectors that are responsible for 54.8 % of euro area greenhouse gas emissions; welcomes the ecb’s announcement to decarbonise its corporate bond holdings; calls for the ‘tilting’ of the ecb’s portfolio to be swift rather than gradual , especially considering that it will apply only to reinvestment of maturing corporate bonds , accounting to around 10% of corporate bond holdings;


### 23. welcomes , furthermore , the announcement on the greening of the ecb’s collateral framework; regrets , however , that this will be limited to instruments issued by non-financial corporations , which represent only a small fraction of the instruments that banks pledge as collateral; ### 23. welcomes , furthermore , the announcement on the greening of the ecb’s collateral framework; regrets , however , that this will be limited to instruments issued by non-financial corporations , which represent only a small fraction of the instruments that banks pledge as collateral; stresses that the lack of climate disclosure requirements for covered bonds in eu legislation represents an obstacle for the ecb to further green its collateral framework; calls on the ecb to require climate disclosure for covered bonds in its eligibility framework pending legislative change;


### 24. regrets that the climate roadmap does not include greening of the ecb’s targeted long-term refinancing operations; stresses that providing cheap liquidity to financial institutions investing in brown activities works against the fight against inflation and is not consistent with the objectives of the paris agreement; ### 24. regrets that the climate roadmap does not include greening of the ecb’s targeted long-term refinancing operations; stresses that providing cheap liquidity to financial institutions investing in brown activities works against the fight against inflation and is not consistent with the objectives of the paris agreement , while offering reduced rates to refinancing operations benefiting renewable energy and energy efficiency would contribute to price stability by reducing risks of a slow and disorderly transition;


### 25. is concerned about the implications of higher interest rates for green investments; calls on the ecb to assess the possibility of applying differentiated rates to support green investments and disincentivise brown investments; ### 25. is concerned about the implications of higher interest rates for green investments; stresses that rate rises will likely dis-incentivise new green investments that have large upfront costs and thus face higher funding costs , when compared to fossil fuel alternatives with relatively low upfront costs; calls on the ecb to assess the possibility of applying differentiated rates to support green investments and disincentivise brown investments;


### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously; ### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; underlines that banks’ losses are lower in an orderly transition scenario than after delayed action; is worried that the estimated credit and market losses in a disorderly transition scenario dangerously underestimate the actual climate-related risk; underlines that two-thirds of banks’ income from non-financial corporate customers stems from greenhouse gas-intensive industries; stresses that risk concentration in the largest systemically essential banks means we could end up at the too-big-to-fail scenario once climate risks start materialising; calls on banks to urgently step up their efforts to measure and manage climate risk; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously;


### 27. stresses the need to further enhance the ecb’s accountability and transparency arrangements; ### 27. stresses the need to further enhance the ecb’s accountability and transparency arrangements; notes that while the ecb has enlarged its toolbox and objectives taken into account alongside inflation , its accountability practices have not evolved; insists on its call for the ecb to take swift action by codifying existing practices and strengthening its accountability framework vis-a-vis the european parliament , thus ensuring that its independence goes hand in hand with its accountability; suggests that the new accountability framework includes (1) enhanced self-evaluation by the ecb through the conduct of impact assessments of different policy options in the annual report , as well as an independent evaluation office modelled after that of the imf , (2) better involvement of the ep in governing council meetings through attendance of the econ chair , (3) improve access of meps to non-public information that inform the decisions of the governing council;


### 28. regrets that only two members of the ecb’s executive board and governing council are women; reiterates that the nominations to the executive board should be gender-balanced , with shortlists submitted to parliament; ### 28. regrets that only two members of the ecb’s executive board and governing council are women; reiterates that the nominations to the executive board should be gender-balanced , with shortlists submitted to parliament; recalls that parliament is committed not to consider shortlists that do not respect the gender balance principle , in accordance with its resolution on gender balance in eu economic and monetary affairs nominations; calls on the euro area member states to do their part and fully incorporate the principle of gender equality in their appointment processes for the position of governor of national central banks;


### 29. regrets that the gender imbalance also persists across the organisational structure of the ecb , notably in the share of women in senior management positions; ### 29. regrets that the gender imbalance also persists across the organisational structure of the ecb , notably in the share of women in senior management positions , with the share of women in ecb management at 30 ,3% in 2019 , welcomes , the ecb’s new strategy to improve gender balance , including the objective of increasing the share of women to between 40 % and 51 % by 2026;


### 30. takes note of ecb staff rules on potential conflicts of interest and encourages the ambitious application thereof; ### 30. takes note of ecb staff rules on potential conflicts of interest and encourages the ambitious application thereof; underlines that the european ombudsman has opened a case into “revolving doors” at the ecb , after a recent case of a senior economist’s move to an american investment bank; calls on the ecb to extend the cooling-off period foreseen for senior salary tiers also to employees in lower salary bands; calls on the ecb to develop a strategy on how to deal with lobbyists and increase transparency of staff level contacts beyond the governing council;


### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; ### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; is concerned that the ecb has selected amazon to collaborate in the sensitive phase of developing a prototype and test its integration with the amazon interface and infrastructure , a company subject to steep eu fines due to data protection violations; regrets that the ecb has not revised its decision despite the concerns expressed by the civil society as well as in the econ committee during mr panetta’s appearance before it on 29 september 2022;


### (5) the rules for eltifs are almost identical for both professional and retail investors , including rules on the use of leverage , on the diversification of assets and composition of the portfolios , on concentration limits and on limits on the eligible assets and investments. both types of investors , however , have different time horizons , risk tolerances and investment needs. because of those almost identical rules and the consequential high administrative burden and associated costs for eltifs destined for professional investors , asset managers have been reluctant to offer tailored products to such investors. professional investors have a higher risk tolerance than retail investors and may have , due to their nature and activities , different time horizon and return objectives. it is therefore appropriate to provide for specific rules for eltifs that are destined to be marketed to professional investors , in particular with regard to the diversification and composition of the portfolio concerned , the minimum threshold for eligible assets , the concentration limits , and the borrowing of cash. ### (5) the rules for eltifs are almost identical for both professional and retail investors , including rules on the use of leverage , on the diversification of assets and composition of the portfolios , on concentration limits and on limits on the eligible assets and investments. both types of investors , however , have different time horizons , risk tolerances and investment needs. because of those almost identical rules , asset managers have been reluctant to offer tailored products to professional investors. professional investors have a higher risk tolerance than retail investors and may have , due to their nature and activities , different time horizon and return objectives. it is therefore appropriate to provide for specific rules for eltifs that are marketed to professional investors , in particular with regard to the fund structure and the borrowing of cash.


### (6) it is necessary to enhance the flexibility of asset managers in investing in a broad categories of real assets. direct or indirect holdings of real assets should therefore be deemed to form a category of eligible assets , provided that those real assets have value due to their nature or substance. such real assets comprise immovable property , communication , environment , energy or transport infrastructure , social infrastructure , including retirement homes or hospitals , as well as infrastructure for education , health and welfare support or industrial facilities , installations , and other assets , including intellectual property , vessels , equipment , machinery , aircraft or rolling stock , and immovable property. ### (6) it is necessary to enhance the flexibility of asset managers in investing in a broad categories of real assets. direct or indirect holdings of real assets should therefore be deemed to form a category of eligible assets , provided that those real assets have value due to their nature or substance. such real assets comprise immovable property , communication , environment , energy or transport infrastructure , social infrastructure , including retirement homes or hospitals , as well as infrastructure for education , health and welfare support or industrial facilities , installations , and other assets , including intellectual property , vessels , equipment , machinery , and immovable property.


### (9) it is necessary to increase the attractiveness of eltifs for asset managers and broaden the range of investment strategies available to eltif managers and thus to avoid the undue limitation of the scope of the eligibility of assets and investment activities of eltifs. the eligibility of real assets should not depend on their nature and objective or upon environmental , sustainability or social and governance related disclosures and conditions , which are already covered by regulation (eu) 2019/2088 of the european parliament and of the council12 and by regulation (eu) 2020/852 of the european parliament and of the council13 . ### (9) it is necessary to increase the attractiveness of eltifs for asset managers and broaden the range of investment strategies available to eltif managers and thus to avoid the undue limitation of the scope of the eligibility of assets and investment activities of eltifs. the eligibility of real assets should take into account the investments needed to finance the green transition and therefore , eligible assets should include assets that comply with the sustainability criteria defined in the delegated acts adopted pursuant to articles 10(3) , 11(3) , 12(2) , 13(2) , 14(2) or 15(2) regulation (eu) 2020/852 of the european parliament and of the council12. additionally , eltifs should not invest in assets the underlying economic activities of which do significantly harm any of the environmental objectives set out in article 9 of regulation (eu) 2020/852 in accordance with article 17 and the delegated acts adopted pursuant to articles 10(3) , 11(3) , 12(2) , 13(2) , 14(2) or 15(2) of that regulation.


### (10) it is necessary to extend the scope of eligible assets and promote the investments of eltifs in securitised assets. it should therefore be clarified that , where the underlying assets consist of long-term exposures , eligible investment assets should also include simple , transparent and standardised (sts) securitisations as referred to in article 18 of regulation (eu) 2017/2402 of the european parliament and of the council14 . those long-term exposures comprise securitisations of residential loans that are secured by one or more mortgages on residential immovable property (residential mortgage backed securities (rmbs)) , commercial loans that are secured by one or more mortgages on commercial immovable property , corporate loans , including loans which are granted to small and medium enterprises (smes) , and trade receivables or other underlying exposures that the originator considers to form a distinct asset type , provided that the proceeds from securitising those trade receivables or other underlying exposures are used for financing or refinancing long-term investments. ### deleted


### (11) in order to improve access of investors to more up-to-date and complete information on the eltif market , it is necessary to increase the granularity and the timeliness of the central public register referred to in article 3(3) , second subparagraph , of regulation (eu) 2015/760 (‘eltif register’). the eltif register should therefore contain additional information to the information that that register contains already , including , where available , the legal entity identifier (‘lei’) and the national code identifier of the eltif , the name , address and the lei of the eltif manager , the international securities identification numbers (‘isin’) codes of the eltif and of each separate share or unit class , the competent authority of the eltif and the home member state of that eltif , the member states where the eltif is marketed , whether the eltif can be marketed to retail investors or can solely be marketed to professional investors , the date of the authorisation of the eltif , and the date on which the marketing of the eltif has commenced. in addition , to enable eltif investors to analyse and compare existing eltifs , the eltif register should contain up-to-date links to the eltif documentation , including to the rules or instruments of incorporation of the eltif concerned , the annual reports , the prospectus and , where available , the key information document drawn up in accordance with regulation (eu) no 1286/2014 of the european parliament and of the council15 . to ensure an up-to-date status of the eltif register , it is appropriate to require competent authorities to communicate to esma any changes to the information on an eltif , including authorisations and withdrawals of such authorisations , on a monthly basis. ### (11) in order to improve access of investors to more up-to-date and complete information on the eltif market , it is necessary to increase the granularity and the timeliness of the central public register referred to in article 3(3) , second subparagraph , of regulation (eu) 2015/760 (‘eltif register’). the eltif register should therefore contain additional information to the information that that register contains already , including , where available , the legal entity identifier (‘lei’) and the national code identifier of the eltif , the name , address and the lei of the eltif manager , the international securities identification numbers (‘isin’) codes of the eltif and of each separate share or unit class , the competent authority of the eltif and the home member state of that eltif , the member states where the eltif is marketed , whether the eltif can be marketed to retail investors or can solely be marketed to professional investors , the date of the authorisation of the eltif , and the date on which the marketing of the eltif has commenced. in addition , to enable eltif investors to analyse and compare existing eltifs , the eltif register should contain up-to-date links to the eltif documentation , including to the rules or instruments of incorporation of the eltif concerned , the annual reports , the prospectus and , where available , the key information document drawn up in accordance with regulation (eu) no 1286/2014 of the european parliament and of the council15 to ensure an up-to-date status of the eltif register , it is appropriate to require competent authorities to communicate to esma any changes to the information on an eltif , including authorisations and withdrawals and refusals of such authorisations , on a monthly basis.


### (14) in order to better use the expertise of the eltif managers and because of diversification benefits , in certain cases it can be beneficial for eltifs to invest all or almost all of their assets into the diversified portfolio of the master eltif. eltifs should therefore be allowed to pool their assets and make use of master-feeder structures by investing in master eltifs. ### (14) in order to better use the expertise of the eltif managers and because of diversification benefits , in certain cases it can be beneficial for eltifs to invest all or almost all of their assets into the diversified portfolio of the master eltif. eltifs should therefore be allowed to pool their assets and make use of master-feeder structures by investing in master eltifs. however , as master-feeder structures are more complex , retail investors might not have sufficient knowledge and expertise to assess the risks associated with their investment. this type of strategy may also increase the fees for retail investors. therefore , the use of master-feeder structure should be allowed only for eltifs marketed to professional investors.


### (15) the diversification requirements laid down in the current version of regulation (eu) 2015/760 were introduced to ensure that eltifs can withstand adverse market circumstances. those diversification thresholds imply , however , that eltifs are , on average , required to make ten distinct investments. in relation to investment in projects or infrastructures of large scale , the requirement to make ten investments per eltif may be difficult to achieve , and costly in terms of transactional costs and capital allocation. to reduce transaction and administrative costs for eltifs and ultimately their investors , eltifs should therefore be able to pursue more concentrated investment strategies and thus to be exposed to fewer eligible assets. it is therefore necessary to adjust the diversification requirements for eltifs’ exposures to single qualifying portfolio undertakings , single real assets , collective investment undertakings and certain other eligible investment assets , contracts and financial instruments. that additional flexibility in the portfolio composition of eltifs and the reduction in the diversification requirements should not materially affect the capacity of eltifs to withstand market volatility , since eltifs typically invest in assets that often do not have a readily available market quotation , may be highly illiquid , and frequently have long-term maturity or time horizon. ### (15) the diversification requirements laid down in the current version of regulation (eu) 2015/760 were introduced to ensure that eltifs can withstand adverse market circumstances. those diversification thresholds imply , however , that eltifs are , on average , required to make ten distinct investments. in relation to investment in projects or infrastructures of large scale , the requirement to make ten investments per eltif may be difficult to achieve , and costly in terms of transactional costs and capital allocation. to reduce transaction and administrative costs for eltifs and ultimately their investors , eltifs should therefore be able to pursue more concentrated investment strategies and thus to be exposed to fewer eligible assets. it is therefore necessary to adjust the diversification requirements for eltifs’ exposures to single qualifying portfolio undertakings , single real assets and certain other eligible investment assets , contracts and financial instruments. that additional flexibility in the portfolio composition of eltifs and the reduction in the diversification requirements should not materially affect the capacity of eltifs to withstand market volatility , since eltifs typically invest in assets that often do not have a readily available market quotation , may be highly illiquid , and frequently have long-term maturity or time horizon.


### (16) unlike retail investors , professional investors may , in certain circumstances , have a longer time horizon , distinct financial returns objectives , more expertise , possess higher risk tolerance to adverse market conditions and higher capacity to absorb losses. such professional thus require less investor protection measure than retail investors. it is therefore appropriate to remove the diversification requirements for eltifs that are solely marketed to professional investors. ### deleted


### (19) article 30(3) of regulation (eu) 2015/760 currently requires , for potential retail investors whose financial instrument portfolio does not exceed eur 500 000 , an initial minimum investment in one or more eltifs of eur 10 000 , and requires that such investors do not invest an aggregate amount exceeding 10 % of that their financial instrument portfolio in eltifs. when applied together , the eur 10 000 minimum initial investment participation and the 10 % limitation on aggregate investment create a significant obstacle for the retail investor to invest in eltifs , which conflicts with the goal of an eltif to establish a retail alternative investment fund product. it is therefore necessary to remove that eur 10 000 initial minimum investment requirement and the 10 % limitation on aggregate investment. ### (19) article 30(3) of regulation (eu) 2015/760 currently requires , for potential retail investors whose financial instrument portfolio does not exceed eur 500 000 , an initial minimum investment in one or more eltifs of eur 10 000 , and requires that such investors do not invest an aggregate amount exceeding 10 % of that their financial instrument portfolio in eltifs. when applied together , the eur 10 000 minimum initial investment participation and the 10 % limitation on aggregate investment create a significant obstacle for the retail investor to invest in eltifs , which conflicts with the goal of an eltif to establish a retail alternative investment fund product. it is therefore necessary to remove that eur 10 000 initial minimum investment requirement and raise it to 30 % the limitation on aggregate investment.


### (24) article 13(1) of regulation (eu) 2015/760 currently requires that eltifs invest at least 70 % of their capital in eligible investment assets. this high threshold for the composition of eligible investment assets in eltifs’ portfolios was initially established in view of the focus of eltifs on long-term investments and the contribution such investments would make to the financing of a sustainable growth of the union’s economy. given the illiquid and idiosyncratic nature of certain eligible investment assets within eltifs’ portfolios , however , it may prove difficult and costly for eltif managers to manage the liquidity of eltifs , honour redemption requests , enter into borrowing arrangements , and execute other elements of eltifs’ investment strategies pertaining to the transfer , valuation and pledging of such eligible investment assets. lowering the eligible investment assets threshold would enable eltif managers to better manage the liquidity of eltifs. ### deleted


### (25) leverage is frequently used to enable the day-to-day operation of an eltif and to carry out a specific investment strategy. moderate amounts of leverage can amplify returns , and , where controlled adequately , without incurring or exacerbating excessive risks. in addition , leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. since the borrowing of cash threshold is currently limited to 30% of the capital of the eltif , eltif managers may be unable to successfully pursue certain investment strategies , including in the case of investments in real assets , where using higher levels of leverage is an industry norm or is otherwise required to achieve attractive risk-adjusted returns. it is therefore appropriate to increase the flexibility of managers of eltifs to raise further capital during the life of the eltif. in view of the possible risks that leverage can entail , eltifs marketed to retail investors should be permitted to borrow cash amounting to up to 50 % of the value of the capital of the eltif. the 50 % threshold is appropriate given the overall borrowing of cash limits common for funds investing in real assets with a similar liquidity and redemption profile. as for eltifs marketed to professional investors , however , a higher leverage threshold should be permitted , because professional investors have a higher risk-tolerance than retail investors. the borrowing of cash threshold for eltifs that are marketed to professional investors only should therefore be extended to 100 % of the eltif capital. ### (25) leverage is frequently used to enable the day-to-day operation of an eltif and to carry out a specific investment strategy. moderate amounts of leverage can amplify returns , and , where controlled adequately , without incurring or exacerbating excessive risks. in addition , leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. since the borrowing of cash threshold is currently limited to 30% of the capital of the eltif , eltif managers are limited in pursuing certain investment strategies , including in the case of investments in real assets , where using higher levels of leverage is an industry norm or is otherwise required to achieve attractive risk-adjusted returns. however , higher leverage entails higher risks. therefore the borrowing cash threshold for eltifs marketed to retail investors should be kept at 30% of the value of the eltif. the 30 % threshold is appropriate given the overall borrowing of cash limits common for funds investing in real assets with a similar liquidity and redemption profile. as for eltifs marketed to professional investors , however , a higher leverage threshold should be permitted , because professional investors have a higher risk-tolerance than retail investors. the borrowing of cash threshold for eltifs that are marketed to professional investors only should therefore be extended to 100 % of the eltif capital


### (26) to provide eltifs with wider investment opportunities , eltifs should be able to borrow in the currency in which the manager of the eltif expects to acquire the asset. it is , however , necessary to mitigate the risk of currency mismatches and thus to limit the currency risk for the investment portfolio. eltifs should therefore either put in place adequate hedges of the currency exposure , or should borrow in another currency where foreign currency exposures do not bring about significant currency risks. ### (26) to provide eltifs with wider investment opportunities , eltifs should be able to borrow in the currency in which the manager of the eltif expects to acquire the asset. it is , however , necessary to mitigate the risk of currency mismatches and thus to limit the currency risk for the investment portfolio. eltifs should therefore put in place adequate hedges of the currency exposure.


### (28) given the increase of the maximum thresholds for borrowing cash by eltifs and the removal of certain limitations on the borrowing of cash in foreign currencies , investors should have more comprehensive information on the borrowing strategy and limits employed by the eltif. it is therefore appropriate to require eltif managers to explicitly disclose in the prospectus of the eltif concerned the borrowing strategy and the borrowing limits and to provide information on how leverage will contribute to the eltif strategy and how currency and duration risks will be mitigated. ### (28) given the increase of the maximum thresholds for borrowing cash by eltifs marketed to professional investors and the removal of certain limitations on the borrowing of cash in foreign currencies , investors should have more comprehensive information on the borrowing strategy and limits employed by the eltif. it is therefore appropriate to require eltif managers to explicitly disclose in the prospectus of the eltif concerned the borrowing strategy and the borrowing limits and to provide information on how leverage will contribute to the eltif strategy and how currency and duration risks will be mitigated.


### (29) article 18(4) of regulation (eu) 2015/760 currently requires that investors in an eltif may request the winding down of that eltif where their redemption requests , made in accordance with the eltif’s redemption policy , have not been satisfied within one year from the date on which those requests were made. given the long-term orientation of eltifs and the often idiosyncratic and illiquid asset profile of eltifs’ portfolios , the entitlement of any investor or a group of investors to request the winding down of an eltif can be disproportionate and detrimental to both the successful execution of the eltif investment strategy and the interests of other investors or groups of investors. it is therefore appropriate to delete the possibility for investors to require the winding down of an eltif where that eltif is unable to satisfy redemption requests. ### (29) article 18(4) of regulation (eu) 2015/760 currently requires that investors in an eltif may request the winding down of that eltif where their redemption requests , made in accordance with the eltif’s redemption policy , have not been satisfied within one year from the date on which those requests were made. given the long-term orientation of eltifs and the often idiosyncratic and illiquid asset profile of eltifs’ portfolios , the entitlement of any investor or a group of investors to request the winding down of an eltif can be disproportionate and detrimental to both the successful execution of the eltif investment strategy and the interests of other investors or groups of investors. it is therefore appropriate to entitle competent authorities to decide whether the winding down of the eltif is justified.


### (31) article 19(1) of the current version of regulation (eu) 2015/760 requires that the rules or instruments of incorporation of an eltif do not prevent units or shares of the eltif from being admitted to trading on a regulated market or on a multilateral trading facility. despite that possibility , eltif managers , investors and market participants have hardly used the secondary trading mechanism by for the trading of shares or units of eltifs. to promote the secondary trading of eltif units or shares , it is appropriate to allow eltif managers to put in place a possibility for an early exit of eltif investors , before the end of the eltif’s life. in order to ensure an effective functioning of such a secondary trading mechanism , such an early exit should be possible only where the manager of the eltif has put in place a policy for matching potential investors and exit requests. that policy should , among others , specify the transfer process , the role of the eltif manager and the eltif administrator , the duration of the liquidity window during which the units or shares of the eltif could be exchanged , the execution price , pro-ration conditions , disclosure requirements , fees , costs and charges and other conditions pertaining to such a liquidity window mechanism. ### (31) article 19(1) of the current version of regulation (eu) 2015/760 requires that the rules or instruments of incorporation of an eltif do not prevent units or shares of the eltif from being admitted to trading on a regulated market or on a multilateral trading facility. despite that possibility , eltif managers , investors and market participants have hardly used the secondary trading mechanism by for the trading of shares or units of eltifs. to promote the secondary trading of eltif units or shares , it is appropriate to allow eltif managers to put in place a possibility for an early exit of eltif investors , before the end of the eltif’s life. in order to ensure an effective functioning of such a secondary trading mechanism , such an early exit should be possible only where the manager of the eltif has put in place a policy for matching potential investors and exit requests. that policy should , among others , specify the transfer process , the role of the eltif manager and the eltif administrator , the duration of the liquidity window during which the units or shares of the eltif could be exchanged , the execution price , pro-ration conditions , disclosure requirements , fees , costs and charges and other conditions pertaining to such a liquidity window mechanism. as the secondary market for eltifs is still rather limited , the eltif manager should clearly indicate that this liquidity window mechanism might not be swiftly actionable at all times.


### (34) adequate disclosure of fees and charges is critically important for the evaluation of the eltifs as a potential investment target by investors. such disclosure is also important where the eltif is marketed to retail investors in the case of master-feeder structures. it is therefore appropriate to require the eltif manager to include in the annual report of the feeder eltif a statement on the aggregate charges of the feeder eltif and the master eltif. ### (34) adequate disclosure of fees and charges is critically important for the evaluation of the eltifs as a potential investment target by investors.


### (40) in order to give eltif managers sufficient time to adapt to the new requirements , including the requirements pertaining to the marketing of eltifs to investors , this regulation should start to apply six months after its entry into force , ### (40) in order to give managers of existing eltif sufficient time to adapt to the new requirements , including the requirements pertaining to the portfolio composition and marketing of eltif to investors , this regulation should start to apply twelve months after its entry into force ,


### 2. the objective of this regulation is to facilitate the raising and channelling of capital towards long-term investments in the real economy , in line with the union objective of smart , sustainable and inclusive growth.; ### 2. the objective of this regulation is to facilitate the raising and channelling of capital towards long-term investments in the real economy , in line with the union objective of smart , sustainable and inclusive growth and of the european green deal.’;


### (6) ‘real asset’ means an asset that has an intrinsic value due to its substance and properties;; ### (6) ‘real asset’ means an asset that has an intrinsic value due to its substance and properties , including infrastructure and other assets that give rise to economic or social benefit , such as education , counselling , research and development , and including commercial property or housing;’;


### the following point (14a) is inserted: ### deleted


### 3. the competent authorities of the eltifs shall , on a monthly basis , inform esma of authorisations granted or withdrawn pursuant to this regulation and of any changes to the information about an eltif that is set out in the central public register referred to in the second subparagraph. ### 3. the competent authorities of the eltifs shall , on a monthly basis , inform esma of authorisations granted , denied or withdrawn pursuant to this regulation and of any changes to the information about an eltif that is set out in the central public register referred to in the second subparagraph.


### the central public register shall be made available in electronic format.; ### the central public register shall be made publicly available in electronic format.


### the name of the proposed manager of the eltif; ### the name of the proposed manager of the eltif and information on its current and previous fund management history and any other experience relevant for the management of the eltif ;


### 1. an asset as referred to in article 9(1) , point (a) , shall only be eligible for investment by an eltif where it falls into one of the following categories: ### 1. an asset as referred to in article 9(1) , point (a) , and in article 9(1a) shall only be eligible for investment by an eltif where it falls into one of the following categories:


### debt instruments issued by a qualifying portfolio undertaking as referred to in article 11(1); ### debt instruments issued by a qualifying portfolio undertaking as referred to in article 11(1) with a maturity aligned to the life of the eltif;


### loans granted by the eltif to a qualifying portfolio undertaking as referred to in article 11(1) with a maturity that does not exceed the life of the eltif; ### loans granted by the eltif to a qualifying portfolio undertaking as referred to in article 11(1) with a maturity aligned with the life of the eltif;


### simple , transparent and standardised securitisations where the underlying exposures correspond to one of the following categories: ### deleted


### paragraphs 1 , 2 and 3 are replaced by the following: ### paragraphs 1 and 2 are replaced by the following:


### 1. an eltif shall invest at least 60 % of its capital in eligible investment assets. ### 1. an eltif shall invest at least 70 % of its capital in eligible investment assets amongst which at least 50% shall meet the taxonomy requirements as laid down in the delegated acts adopted pursuant to articles 10(3) , 11(3) , 12(2) , 13(2) , 14(2) or 15(2) of regulation (eu) 2020/852.


### 20 % of its capital in units or shares of any single eltif , euveca , eusef , ucits or eu aif managed by an eu aifm; ### 10 % of its capital in units or shares of any single eltif , euveca , eusef , ucits or eu aif managed by an eu aifm;


### 10 % of its capital in assets as referred to in article 9(1) , point (b) , where those assets have been issued by any single body. ### 5% of its capital in assets as referred to in article 9(1) , point (b) , where those assets have been issued by any single body.


### 3. the aggregate value of units or shares of eltifs , euvecas , eusefs , ucits and of eu aifs managed by eu aifm in an eltif portfolio shall not exceed 40 % of the value of the capital of the eltif.; ### deleted


### the following paragraph 3a is inserted: ### deleted


### in paragraph 6 , the first sentence is replaced by the following: ### deleted


### the following paragraph 8 is added: ### deleted


### 1. an eltif may acquire no more than 30 % of the units or shares of a single eltif , euveca , eusef , ucits or of an eu aif managed by an eu aifm. that limit shall not apply where eltifs are marketed solely to professional investors.; ### 1. an eltif may acquire no more than 30 % of the units or shares of a single eltif , euveca , eusef , ucits or of an eu aif managed by an eu aifm;


### in paragraph 2 , the following subparagraph is added: ### deleted


### it represents no more than 50 % of the value of the capital of the eltif , and no more than 100 % of the value of the capital of the eltif for eltifs marketed solely to professional investors; ### it represents no more than 30 % of the value of the capital of the eltif , and no more than 100 % of the value of the capital of the eltif for eltifs marketed solely to professional investors;


### it is contracted in the same currency as the assets to be acquired with the borrowed cash or in another currency where currency exposure has been hedged or where it can be otherwise demonstrated that the borrowing in another currency does not expose the eltif to material currency risks.; ### it is contracted in the same currency as the assets to be acquired with the borrowed cash or in another currency where currency exposure has been hedged ;


### the following paragraph 1a is inserted: ### deleted


### (11) in article 18 , paragraph 4 is deleted; ### (11) in article 18 , paragraph 4 is replaced by the following:


### in paragraph 5 , the following subparagraph is added: ### deleted


### 3. paragraphs 1 and 2 shall not apply where the retail investor is a member of senior staff , portfolio manager , director , officer , agent or employee of the manager or of an affiliate of the manager and has sufficient knowledge about the eltif concerned. ### 3. paragraphs 1 and 2 shall not apply where the retail investor is a member of senior staff , portfolio manager or director of the manager or of an affiliate of the manager and has sufficient knowledge about the eltif concerned.


### 4. in case of a master-feeder structure , the prospectus of the feeder eltif shall contain all of the following information: ### deleted


### 5. a feeder eltif shall disclose in any marketing communications that it permanently invests 85 % or more of its assets in units of the master eltif. ### deleted


### it shall apply from [entry into force + 6 months]. ### it shall apply from [entry into force + 12 months].


### (2) in a continued effort to put an end to tax practices of mnes which allow them to shift profits to jurisdictions where they are subject to no or very low taxation , the oecd has further developed a set of international tax rules to ensure that mnes pay a fair share of tax wherever they operate. this major reform aims to put a floor on competition over corporate income tax rates through the establishment of a global minimum level of taxation. by removing a substantial part of the advantages of shifting profits to jurisdictions with no or very low taxation , the global minimum tax reform will level the playing field for businesses worldwide and allow jurisdictions to better protect their tax bases. ### (2) in a continued effort to put an end to tax practices of mnes which allow them to shift profits to jurisdictions where they are subject to no or very low taxation , the oecd has further developed a set of international tax rules to ensure that mnes pay a fair share of tax wherever they operate. this major reform aims to put a floor on competition over corporate income tax rates through the establishment of a global minimum level of taxation. by removing a substantial part of the advantages of shifting profits to jurisdictions with no or very low taxation , the global minimum tax reform will level the playing field for businesses worldwide , enabling businesses to be taxed where they have real economic activities and allow jurisdictions to better protect their tax bases.


### (3) this political objective has been translated into the global anti-base erosion model rules (globe model rules) approved on 14 december 2021 by the oecd/g20 inclusive framework on beps to which member states have committed. in the council conclusions of 7 december 20218 , the council reiterated its firm support of the global minimum tax reform and committed to a swift implementation of the agreement by means of union legislation. in this context , it is essential that member states effectively implement their commitment to achieve a global minimum level of taxation. ### (3) this political objective has been translated into the global anti-base erosion model rules (globe model rules) approved on 14 december 2021 by the oecd/g20 inclusive framework on beps to which member states have committed. in the council conclusions of 7 december 2021 1a ,the council reiterated its firm support of the global minimum tax reform and committed to a swift implementation of the agreement by means of union legislation under article 20 teu , articles 115 or 116 tfeu. in this context , it is essential that member states effectively implement their commitment to achieve a global minimum level of taxation.


### (4) in a union of closely integrated economies , it is crucial that the global minimum tax reform is implemented in a sufficiently coherent and coordinated fashion. considering the scale , detail and technicalities of those new international tax rules , only a common union framework would prevent a fragmentation of the internal market in the implementation of them. moreover , a common framework , designed to be compatible with the fundamental freedoms guaranteed by the treaty , would provide taxpayers with legal certainty when implementing the rules. ### (4) in a union of closely integrated economies , it is crucial that the global minimum tax reform is implemented in a sufficiently coherent and coordinated fashion. considering the scale , detail and technicalities of those new international tax rules , a common union framework would prevent a fragmentation of the internal market in the implementation of them. moreover , a common framework , designed to be compatible with the fundamental freedoms guaranteed by the treaty , would provide taxpayers with legal certainty when implementing the rules and provides the opportunity to apply the rules differently and more ambitiously within the eu.


### (5) it is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at union level. the framework creates a system of two interlocked rules , together referred to as the globe rules , through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (etr) of an mne in a given jurisdiction is below the 15 %. in such case , the jurisdiction is considered to be low-taxed. those two rules are called the income inclusion rule (iir) and the undertaxed payment rule (utpr). under this system , the parent entity of an mne located in a member state has the obligation to apply the iir to its share of top-up tax relating to any entity of the group that is low-taxed , whether this is located within or outside the union. the utpr should act as a backstop to the iir through a reallocation of any residual amount of top-up tax in cases where not the entire amount of top-up tax relating to low-taxed entities could be collected by parent entities through the application of the iir. ### (5) it is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at union level. the framework creates a system of two interlocked rules , together referred to as the globe rules , through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (etr) of an mne in a given jurisdiction is below 21 %. in such case , the jurisdiction is considered to be low-taxed. those two rules are called the income inclusion rule (iir) and the undertaxed payment rule(utpr). under this system , the parent entity of an mne located in a member state has the obligation to apply the iir to its share of top-up tax relating to any entity of the group that is low-taxed , whether this is located within or outside the union. the utpr should act as a backstop to the iir through a reallocation of any residual amount of top-up tax in cases where not the entire amount of top-up tax relating to low-taxed entities could be collected by parent entities through the application of the iir.


### (6) it is necessary to implement the globe model rules agreed by the member states in a way that it remains as close as possible to the global agreement. this directive closely follows the content and structure of the globe model rules. to ensure compatibility with primary union law , and more precisely with the freedom of establishment , the rules of this directive should apply to entities resident in a member state as well as non-resident entities of a parent entity located in that member state. this directive should also apply to very large-scale , purely domestic groups. in this way , the legal framework would be designed to avoid any risk of discrimination between cross-border and domestic situations. all entities , including the parent entity that applies the iir , which are located in a member state that is low-taxed , would be subject to the top-up tax. equally , constituent entities of the same parent entity that are located in another member state , which is low-taxed , would be subject to the top-up tax. ### (6) it is necessary to implement the globe model rules agreed by the member states in a way that it remains coherent to the global agreement. this directive generally follows the content and structure of the globe model rules but diverges in certain aspects , amongst others for the application of certain rules in the union. to ensure compatibility with primary union law , and more precisely with the freedom of establishment , the rules of this directive should apply to entities resident in a member state as well as non-resident entities of a parent entity located in that member state. this directive should also apply to very large-scale , purely domestic groups. in this way , the legal framework would be designed to avoid any risk of discrimination between cross-border and domestic situations. all entities , including the parent entity that applies the iir , which are located in a member state that is low-taxed , would be subject to the top-up tax. equally , constituent entities of the same parent entity that are located in another member state , which is low-taxed , would be subject to the top-up tax.


### (7) while it is necessary to ensure that tax avoidance practices are discouraged , adverse impacts on smaller mnes in the internal market should be avoided. for this purpose , this directive should only apply to entities located in the union that are members of mne groups or large-scale domestic groups that meet the annual threshold of at least eur 750 000 000 of consolidated revenue. this threshold would be consistent with the threshold of existing international tax rules such as the country-by-country reporting rules9 . entities within the scope of this directive are referred to as constituent entities. certain entities should be excluded from the scope based on their particular purpose and status. excluded entities would be those that are not profit-driven and perform activities in the general interest and which are , for these reasons , not likely to be subject to tax in the member state in which they are located. in order to protect those specific interests , it is necessary to exclude from the scope of the directive governmental entities , international organisations , non-profit organisations and pension funds from the scope of this directive. investment funds and real estate investment vehicles should also be excluded from the scope when they are at the top of the ownership chain , since , for those so-called flow-through entities , the income earned is taxed at the level of the owners. ### (7) to ensure that tax avoidance practices are discouraged , this directive allows member states to apply the iir to entities located in the union that are members of mne groups or large-scale domestic groups that meet the annual threshold of eur 750 000 000 or lower of consolidated revenue. member states could consider to lower the threshold to eur 40 000 000 in view of the directive 2013/34/eu. entities within the scope of this directive are referred to as constituent entities. certain entities should be excluded from the scope based on their particular purpose and status. excluded entities would be those that are not profit-driven and perform activities in the general interest and which are , for these reasons , not likely to be subject to tax in the member state in which they are located. in order to protect those specific interests , it is necessary to exclude from the scope of the directive governmental entities , international organisations , non-profit organisations and pension funds from the scope of this directive.


### (12) the etr of an mne group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to the agreed minimum tax rate of 15 % in order to determine whether the mne group or large-scale domestic group is liable to pay a top-up tax and consequently should apply the iir or the utpr. the minimum tax rate of 15 % agreed by the oecd/g20 inclusive framework on beps reflects a balance amongst corporate tax rates worldwide. in cases where the etr of an mne group falls below the minimum tax rate in a given jurisdiction , the top-up tax should be allocated to the entities in the mne group that are liable to pay the tax in accordance with the application of the iir and the utpr , in order to comply with the globally agreed minimum effective rate of 15 %. in cases where the etr of a large-scale domestic group falls below the minimum tax rate , the upe at the top of the large-scale domestic group should apply the iir in respect of its low-taxed constituent entities , in order to ensure that such group is liable to pay tax at an effective minimum rate of 15 %. ### (12) the etr of an mne group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to the minimum tax rate of at least 21 % in order to determine whether the mne group or large-scale domestic group is liable to pay a top-up tax and consequently should apply the iir or the utpr. the minimum tax rate of 15 % agreed by the oecd/g20 inclusive framework on beps is a minimum standard. opting for a higher rate does not undermine the coherence of the union’s legislation with the international agreement. in cases where the etr of an mne group falls below the minimum tax rate in a given jurisdiction , the top-up tax should be allocated to the entities in the mne group that are liable to pay the tax in accordance with the application of the iir and the utpr , in order to comply with the minimum effective rate of at least 21%. in cases where the etr of a large-scale domestic group falls below the minimum tax rate , the upe at the top of the large-scale domestic group should apply the iir in respect of its low-taxed constituent entities , in order to ensure that such group is liable to pay tax at an effective minimum rate as defined by the relevant jurisdiction.


### (13) in order to allow member states to benefit from the top-up tax revenues collected on their low-taxed constituent entities located in their territory , member states should be able to elect to apply a domestic top-up tax system. constituent entities of an mne group that are located in a member state which has elected to implement rules equivalent to the iir and the utpr in their own domestic tax system should pay the top-up tax to this member state. while leaving member states some flexibility in the technical implementation of the domestic top-up tax system , such system should ensure the minimum effective taxation of the qualifying income or loss of the constituent entities in the same , or in an equivalent manner , to the iir and utpr of this directive. ### (13) in order to allow member states to benefit from the top-up tax revenues collected on their low-taxed constituent entities located in their territory , member states have the option to apply a domestic top-up tax system. constituent entities of an mne group that are located in a member state which has elected to implement rules coherent to the iir and the utpr as designed in this directive in their own domestic tax system should pay the top-up tax to this member state. given the risks of circumvention related to the effective collection of the domestic top-up tax , the code of conduct group on business taxation should monitor its application carefully. the commission should provide assistance in that regard.


### (14) to ensure a proportionate approach , this exercise should take into consideration certain specific situations in which beps risks are reduced. therefore , the directive should include a substance carve-out based on the costs associated with employees and the value of tangible assets in a given jurisdiction. this would allow to address , to a certain extent , situations where an mne group or a large-scale domestic group carries out economic activities which require material presence in a low-taxed jurisdiction as in such case beps practices would be unlikely to flourish. the specific case of mne groups that are at the first stages of their international activity should also be considered in order not to discourage the development of cross-border activities for mne groups that benefit from low taxation in their domestic jurisdiction where they are predominantly operating. thus , the low-taxed domestic activities of such groups should be excluded from the application of the rules for a transitional period of five years , and provided that the mne group does not have constituent entities in more than six other jurisdictions. in order to ensure equal treatment for large-scale domestic groups , the income from the activities of such groups should also be excluded for a transitional period of five years. ### (14) the directive includes a substance carve-out based on the costs associated with employees and the value of tangible assets for jurisdictions outside of the union. this to remain in coherence and respect the oecd/g20 inclusive framework agreement.


### (15) due to its highly volatile nature and the long economic cycle of this industry , the shipping sector is traditionally subject to alternative or supplementary taxation regimes in member states. to avoid undermining that policy rationale and allow member states to continue applying a specific tax treatment to the shipping sector in line with international practice and state aid rules , shipping income should be excluded from the system. ### deleted


### (16) in order to achieve a balance between the objectives of the global minimum tax reform and the administrative burden for tax administrations and taxpayers , this directive should provide for a de minimis exclusion for mne groups or large-scale domestic groups that have an average revenue of less than eur 10 000 000 and an average qualifying income or loss of less than eur 1 000 000 in a jurisdiction. such mne groups or large-scale domestic groups should not pay a top-up tax even if their etr is below the minimum tax rate in that jurisdiction. ### (16) to respect and in coherence with the oecd/g20 inclusive framework agreement this directive provides for a de minimis exclusion for mne groups or large-scale domestic groups that have an average revenue of less than eur 10 000 000 and an average qualifying income or loss of less than eur 1 000 000 in a jurisdiction outside of the union. such mne groups or large-scale domestic groups should not pay a top-up tax even if their etr is below the minimum tax rate in that jurisdiction outside of the union.


### (17) the application of the rules of this directive to mne groups and large-scale domestic groups that fall within its scope for the first time could give rise to distortions resulting from the existence of tax attributes , including losses from prior fiscal years , or from timing differences , and require transitional rules to eliminate such distortions. a gradual decrease of the rates for the payroll and the tangible assets carve-outs over ten years should also apply to allow a smooth transition to the new tax system. ### deleted


### (18) for an efficient application of the system , it is crucial that procedures are coordinated at a group level. it will be necessary to operate a system ensuring the unobstructed flow of information within the mne group and towards tax administrations where constituent entities are located. the primary responsibility of filing the information return should lie on the constituent entity itself. a waiver of such responsibility should however apply where the mne group has designated another entity to file and share the information return. it could be either a local entity or an entity from another jurisdiction that has a competent authority agreement in place with the member state of the constituent entity. in the first twelve-months after its entry into force , the commission should review this directive in line with the agreement reached by the inclusive framework on filing requirements under the globe implementation framework. considering the compliance adjustments that this system requires , groups that fall within the scope of this directive for the first time should be granted a period of 18 months to comply with the information requirements. ### (18) for an efficient application of the system , it is crucial that procedures are coordinated at a group level. it will be necessary to operate a system ensuring the unobstructed flow of information within the mne group and towards tax administrations where constituent entities are located. the primary responsibility of filing the information return should lie on the constituent entity itself. a waiver of such responsibility should however apply where the mne group has designated another entity to file and share the information return. it could be either a local entity or an entity from another jurisdiction that has a competent authority agreement in place with the member state of the constituent entity. in the first twelve-months after its entry into force , the commission should review this directive , via relevant delegated acts , in line with the agreement reached by the inclusive framework on filing requirements under the globe implementation framework. considering the compliance adjustments that this system requires , groups that fall within the scope of this directive for the first time should be granted a period of 18 months to comply with the information requirements.


### (19) considering the benefits of transparency in the field of tax , it is encouraging that a significant amount of information will be filed with the tax authorities in all the participating jurisdictions. mne groups within the scope of this directive should be obliged to provide comprehensive and detailed information on their profits and effective tax rate in every jurisdiction where they have constituent entities. such extensive reporting could be expected to increase transparency. ### (19) considering the benefits of transparency in the field of tax , it is encouraging that a significant amount of information will be filed with the tax authorities in all the participating jurisdictions. mne groups within the scope of this directive should be obliged to provide comprehensive and detailed information on their profits and effective tax rate in every jurisdiction where they have constituent entities. such extensive reporting could be expected to increase transparency. more transparency in financial disclosure results in benefits for tax administration and more tax certainty for taxpayers. in that context , council directive 2011/16/eu2a will play a role in facilitating the implementation of this directive and the future revision of directive 2011/16/eu will be subject to an impact assessment to be carried out before 31 december 2022.


### (20) the effectiveness and fairness of the global minimum tax reform heavily relies on its worldwide implementation. it will thus be vital that all major trading partners of the union apply either a qualified iir or an equivalent set of rules on minimum taxation. in this context , and in support of legal certainty and efficiency of the global minimum tax rules , it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the rules of the global agreement can be granted equivalence to a qualified iir. to this end , this directive should provide for an assessment , by the commission , of the equivalence criteria based on certain parameters together with a listing of third country jurisdictions that meet the equivalence criteria. this list would be modified , through a delegated act , following any subsequent assessment of the legal framework implemented by a third country jurisdiction in its domestic law. ### (20) the effectiveness and fairness of the global minimum tax reform heavily relies on its worldwide implementation. it will thus be vital that all major trading partners of the union apply either a qualified iir or an equivalent set of rules on minimum taxation. in this context , and in support of legal certainty and efficiency of the global minimum tax rules , it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the minimum rules of the global agreement can be granted equivalence to a qualified iir. to this end , this directive should provide for an assessment , by the commission , of the equivalence criteria based on certain parameters together with a listing of third country jurisdictions that meet the equivalence criteria. this list would be modified , through a delegated act , following any subsequent assessment of the legal framework implemented by a third country jurisdiction in its domestic law.


### (23) the objective of this directive , to create a common framework for a global minimum level of taxation within the union on the basis of the common approach contained in the globe model rules , cannot sufficiently be achieved by each member state acting alone. independent action by member states would further risk creating a fragmentation of the internal market. as it is critical to adopt solutions that function for the internal market as a whole , this objective can , by reason of the scale of the global minimum tax reform , be better achieved at union level. the union may therefore adopt measures , in accordance with the principle of subsidiarity as set out in article 5 of the treaty on european union. ### (23) to avoid fragmentation of the internal market it is critical to adopt solutions that function for the internal market as a whole , this objective can , by reason of the scale of the global minimum tax reform , be better achieved at union level. the union may therefore adopt measures , in accordance with the principle of subsidiarity as set out in article 5 of the treaty on european union.


### 1. this directive shall apply to constituent entities located in the union that are members of an mne group or a large-scale domestic group which has an annual revenue of eur 750 000 000 or more in its consolidated financial statements in at least two of the last four consecutive fiscal years. ### 1. this directive shall apply to constituent entities located in the union that are members of an mne group or a large-scale domestic group which has an annual revenue of eur 750 000 000 or more in its consolidated financial statement of the last fiscal year. each member state may apply an income inclusion rule in accordance with this directive also to mne groups which have annual revenues above a nationally defined lower threshold if the ultimate parent entity is tax resident in this member state. the same threshold shall then apply to large-scale domestic groups of this member state.


### 2. where one or more of the four fiscal years referred to in paragraph 1 is longer or shorter than 12 months , the annual revenue referred to in that paragraph shall be adjusted proportionally for each of those fiscal years. ### 2. where the fiscal year referred to in paragraph 1 is longer or shorter than 12 months , the annual revenue referred to in that paragraph shall be adjusted proportionally.


### a governmental entity , an international organisation , a non-profit organisation , a pension fund , an investment entity that is an ultimate parent entity and a real estate investment vehicle that is an ultimate parent entity; or ### a governmental entity , an international organisation , a non-profit organisation , a pension fund;


### (12) ‘minimum tax rate’ means fifteen percent (15 %); ### (12) ‘minimum tax rate’ means at least twenty-one percent (21%);


### provides for the determination of the excess profits of the constituent entities located in that jurisdiction in accordance with the rules laid down in this directive and the application of the minimum tax rate to those excess profits for the jurisdiction and the constituent entities in accordance with the rules laid down in this directive; and ### provides for the determination of the excess profits of the constituent entities located in that jurisdiction and the application of the minimum tax rate to those excess profits for the jurisdiction and the constituent entities.


### is implemented and administered in a way that is consistent with the rules laid down in this directive and does not allow the jurisdiction to provide any benefits that are related to those rules; ### deleted


### (32) ‘qualified refundable tax credit’ means: ### deleted


### 1. a constituent entity other than a flow-through entity shall be deemed to be located in the jurisdiction where it is considered as resident for tax purposes based on its place of management , place of creation or similar criteria. ### 1. a constituent entity other than a flow-through entity shall be deemed to be located in the jurisdiction where it is considered as resident for tax purposes based on its place of effective management , namely the place where key management and commercial decisions that are necessary for the conduct of business in that jurisdiction are taken , or similar criteria reflecting real economic activities.


### 2. where a parent entity of an mne group is located in a member state , and its directly or indirectly held low-taxed constituent entities located in another member state or in a third country jurisdiction are subject to a qualified domestic top-up tax for the fiscal year in that jurisdiction , the amount of any top-up tax computed in accordance with article 26 due by the parent entity pursuant to articles 5 , 6 and 7 shall be reduced , up to zero , by the amount of top-up tax due by those constituent entities. ### deleted


### 3. where the amount of qualified domestic top-up tax taken into consideration in the computation of the jurisdictional top-up tax in accordance with article 26 for a fiscal year has not been fully paid within the three following fiscal years , the amount of domestic top-up tax that was not paid shall be added to the jurisdictional top-up tax computed in accordance with article 26(3). ### deleted


### 4. member states that elect to apply a domestic top-up tax shall notify the commission of this election within four months following the adoption of their national laws , regulations and administrative provisions necessary to comply with this directive. ### 4. member states that elect to apply a domestic top-up tax shall notify the commission of this election within four months.


### 3. at the election of the filing constituent entity , the amount of stock-based compensation expense that has been allowed as a deduction for tax purposes by a constituent entity for a fiscal year may be deducted from the financial accounting net income or loss of that constituent entity for the computation of its qualifying income or loss for the same fiscal year. ### deleted


### 5. qualified refundable tax credits shall be treated as income for the computation of the qualifying income or loss of a constituent entity. refundable tax credits that do not meet the definition of a qualified refundable tax credit as set out in article 3 , point (32) shall not be treated as income for the computation of the qualifying income or loss of a constituent entity. ### 5. refundable tax credits shall not be treated as income for the computation of the qualifying income or loss of a constituent entity.


### [...] ### deleted


### taxes imposed in lieu of a generally applicable corporate income tax; and ### taxes imposed in lieu of a generally applicable corporate income tax , understood as alternatives to corporate income tax such as alternative minimum taxes; and


### the top-up tax accrued by a constituent entity under a qualified domestic top-up tax; ### deleted


### the amount of credit or refund in respect of a qualified refundable tax credit that was accrued as a reduction to the tax expense. ### deleted