### 2. notes that the estimated tax compliance costs for large companies amount to about 2 % of taxes paid , while for small and medium-sized enterprises (smes) the estimate is about 30 % of taxes paid4 ; ### 2. notes that the estimated tax compliance costs for large companies (mnes) amount to about 2 % of taxes paid , while for small and medium-sized enterprises (smes) the estimate is about 30 % of taxes paid4 ; notes further that empirical evidence suggests that mnes’ profits tend to be taxed less than profits of domestic peers , reflecting profit shifting from high- to low-tax affiliates ;


### 4. notes that tax base harmonisation such as the common corporate tax base or the ‘business in europe: framework for income taxation’ could reduce the cost of tax compliance for smes that operate in more than one member state; ### 4. notes that tax base harmonisation such as the common corporate tax base or the ‘business in europe: framework for income taxation’ (befit) could reduce the cost of tax compliance for smes that operate in more than one member state; reiterates that taxing profits where the economic activities take place will allow governments to offer a level playing field for their smes , that struggle to cope with unfair competition from mnes; highlights the need to tax corporations on the basis of a fair and effective formula for the allocation of taxing rights between countries;


### 5. notes that many member states as well as the eu have introduced dedicated regimes favouring smes such as special vat rules in order to offset the higher effective tax rates and higher tax compliance costs for smes; stresses that such special treatment , while generally positive , could risk introducing further distortions and further increasing the overall complexity of the system; ### 5. notes that many member states as well as the eu have introduced dedicated regimes favouring smes such as special vat rules in order to offset the higher effective tax rates and higher tax compliance costs for smes; stresses that such special treatment , while generally positive , could risk introducing further distortions and further increasing the overall complexity of the system; highlights also that special regimes such as lower corporate income tax rates push high-income earners to incorporate avoiding progressive personal income taxation; notes that the corporate sector now accounts for a greater proportion of the overall economy due to a race to the bottom in corporate tax rates and the shift from personal income taxation to corporate income taxation;


### 6. notes that the eu has developed coordination mechanisms such as peer review procedures within the code of conduct group and country-specific recommendations in the context of the european semester; points out that the commission has recommended to six member states that they curb aggressive tax planning as part of the 2020 country-specific recommendations; ### 6. notes that the eu has developed coordination mechanisms such as peer review procedures within the code of conduct group and country-specific recommendations in the context of the european semester; points out that the commission has recommended to six member states that they curb aggressive tax planning as part of the 2020 country-specific recommendations; ; welcomes the commission’s integration of the country-specific recommendations to the assessment of the national recovery and resilience plans; calls on the commission to make the country-specific recommendation regarding aggressive tax planning a regular feature of the european semester and to further expand beyond corporate income taxation;


### 7. highlights that the ideal level for tax policy coordination is on the international stage through the g20/oecd; notes that eu tax proposals based on international agreements have historically been more likely to be adopted by the council; ### 7. highlights that the ideal level for tax policy coordination is on the international stage through , amongst others , the g20/oecd; notes that eu tax proposals based on international agreements have historically been more likely to be adopted by the council due to the unanimity rule; highlights , however , that proposals by the european commission and unilateral measures at member state level constitute a crucial step towards finding a global solution in the absence of such global solution;


### 9. notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination; deplores the fact that some member states have pressed ahead with the introduction of national digital taxes despite ongoing negotiations at eu and oecd levels; stresses that these national measures should be phased out following the implementation of an effective international solution; ### 9. notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination;


### 11. notes that debt equity bias varies considerably between the member states; welcomes the fact that some member states have introduced allowances for corporate equity to address this issue; stresses that a common european approach would be preferable in order to avoid distortions in the single market; ### 11. notes that debt equity bias varies considerably between the member states; welcomes the fact that some member states have ambitiously transposed the interest-limitation rules as included in the first anti-tax avoidance directive; stresses that limiting further or abolishing the deductibility of interest costs would be preferable to avoid aggressive tax planning by companies and reducing corporate debt rates;


### 12. looks forward to the commission’s proposal for a debt equity bias reduction allowance5 ; ### 12. notes the commission’s proposal for a debt equity bias reduction allowance5 ; urges the commission to equally propose rules to further limit the deductibility of interest costs; is concerned by the possible losses of tax revenues in times of budget deficits and need for large-scale public investments with a debt equity bias reduction allowance;


### 13. notes that the effective marginal tax rate (emtr) is often a decisive factor for corporations making investment decisions; notes that there is considerable variation in the emtr across member states; invites the commission to look into whether some member states are distorting competition by artificially lowering their emtr , e.g. through accelerated depreciation schedules or adjusting the tax deductibility of certain items; ### 13. notes that the effective marginal tax rate (emtr) is often a decisive factor for corporations making investment decisions; notes that there is considerable variation in the emtr across member states; invites the commission to look into whether some member states are distorting competition by artificially lowering their emtr , e.g. through accelerated depreciation schedules or adjusting the tax deductibility of certain items; notes that the emtr do not reflect the impact of aggressive tax planning or of tax rulings and special tax regimes;


### 14. highlights that tax incentives for private research and development (e.g. via tax credits , enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development , which often comes with positive externalities; is concerned , however , that certain types of tax incentives such as patent box / intellectual property box regimes do little to increase research and development spending and may actually distort the single market; ### 14. highlights that tax incentives for private research and development (e.g. via tax credits , enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development , which often comes with positive externalities; is concerned , however , that certain types of tax incentives such as patent box / intellectual property box regimes do little to increase research and development spending and actually incited profit shifting and aggressive tax planning;


### 15. stresses that further harmonisation regarding tax incentives for research and development spending may be warranted; notes that that this was part of the commission’s initial common corporate tax base proposal; deplores the fact that the topic was not addressed in the recent communication on business taxation for the 21st century; ### 15. stresses that further harmonisation regarding tax incentives for research and development spending may be warranted; notes that that this was part of the commission’s initial common corporate tax base proposal; deplores the fact that the topic was not addressed in the recent communication on business taxation for the 21st century; notes that tax incentives should aim at attracting investments in the real economy and therefore be expenditure based instead of profit based;


### 2. highlights that current tax systems , and the fiscal capacities of member states , are already facing and will increasingly face severe shocks , such as the need for large public investments to sustain the economic recovery and the green transition , the ageing of our societies and the consequent reduction in the working-age population , the digital transformation of our labour markets , increased tax competition and the existing tax gap10 ; ### 2. observes that as the transformation of production-consumption systems proceeds , in the context of rapid innovation ,population ageing , changing work relations and shifting resource use patterns ,the fiscal and social security systems will have to be reformed to remainviable and support transitions; highlights with concern that current tax systems , and the fiscal capacities of member states ,are already facing and will increasingly face severe shocks:


### 3. underlines that taxation and tax collection have shifted the tax incidence from wealth to income , from capital to labour income and consumption , from mnes to smes , and from the financial sector to the real economy; observes with concern this shift in the tax burden from more mobile to less mobile taxpayers , resulting in a lower average tax burden for the very income-rich11 ; ### 3. underlines that taxation and tax collection have shifted the tax incidence from wealth to income , from capital to labour income and consumption , from mnes to smes , and from the financial sector to the real economy; observes with concern this shift in the tax burden from more mobile to less mobile taxpayers , resulting in a lower average tax burden for the very income-rich11; concludes that in absence of european coordination , globalisation limits the capacities of countries to design their tax policies , including redistribution;


### 4. points out that technological progress and economic integration are making the taxpayers and tax bases of all types of tax increasingly mobile12 ; notes that this could reinforce the tendency to rely on immobile tax bases; ### 4. points out that technological progress and economic integration are making the taxpayers and tax bases of all types of tax increasingly mobile12 ; notes that this could reinforce the tendency to rely on immobile tax bases; notes further that this could reinforce the tendency to rely on immobile tax bases to finance public budgets and lead to a possibly significant reallocation of mobile tax bases across jurisdictions; emphasises that such tendency lowers the tax morale and leads to severe unequal outcomes for ordinary citizens , in particular women , self-employed and smes;


### 5. observes that in spite of the numerous calls for shifting taxation from labour to pollution , revenues from taxes on pollution and resources in particular have remained very low , and yet they offer a potential source for increasing revenue through the application of the ‘polluter pays’ principle and are difficult to evade owing to the character of the tax base; ### 5. observes that in spite of the numerous calls for shifting taxation from labour to pollution , revenues from taxes on pollution and resources in particular have remained very low , and yet they offer a potential source for increasing revenue through the application of the ‘polluter pays’ principle and are difficult to evade owing to the character of the tax base; notes that environmental taxes only raise 6% of total tax revenues1c; notes that energy tax revenues constitute the main component of environmental tax receipts for almost all countries (accounting for almost 78 % of eu-27environmental tax revenues) , of which transport fuel taxes represent around 67% of receipts , followed by non-fuel transport taxes (19 %) and pollution/resources taxes (3 %) ; regrets that there is continuing government support for highly polluting industries; recalls that according to the oecd , carbon intensive industries have benefitted from around 50% of the coronavirus financial support packages1d


### 8. notes with concern that the impact of the covid-19 pandemic is highly regressive , with the poorest households being the most severely hit14 ; regrets that large companies that realise excess profits , such as e-commerce businesses and wealthy individuals who realise significant capital gains through speculation , are often undertaxed; ### 8. notes with concern that the impact of the covid-19 pandemic is highly regressive , with the poorest households being the most severely hit14 ; regrets that large companies that realise excess profits , such as e-commerce businesses and wealthy individuals who realise significant capital gains through speculation , are often undertaxed; warns that if no action is taken to rebalance the tax mix the tax morale of ordinary citizen , self-employed and smes will be further damaged;


### 9. highlights that environmental taxes have the potential to cover the need for additional revenue while supporting a resilient , competitive , sustainable and carbon-free economy; calls on member states to consider expanding the tax base for environmental taxes through inter alia natural resource taxes , distance-based charges in the transport sector , fuel prices , and the taxation of deforestation , landfill , incineration , pesticides and fertilizers; ### 9. underlines that large institutions such as imf , world bank and oecd call for a comprehensive shift to taxing pollution; notes that taxation is seen as the single most effective way of pricing carbon; highlights that environmental taxes have the potential to cover the need for additional revenue while supporting a resilient , competitive , sustainable and carbon-free economy; calls on member states to consider expanding the tax base for environmental taxes through inter alia :


### 12. calls on member states to revise tax expenditure in all tax areas; calls on member states to perform annual , detailed and public cost-benefit analyses of each tax provision; ### 12. calls on member states to revise tax expenditure in all tax areas; calls on member states to perform annual , detailed and public cost-benefit analyses of each tax provision; notes that tax incentives should aim at attracting investments in the ‘real’ economy , profit-based tax incentives , such as patent boxes , should be avoided as these often lead to abusive schemes and loss of revenues;


### 15. calls on the commission to publish a roadmap and toolkit to guide member states in reforming their tax systems post covid-19; calls on the commission to launch a comprehensive evaluation , to be followed by an action plan , on existing and important distortions in all tax areas that could severely impede member states in reforming their tax systems; ### 15. calls on the commission to publish a roadmap and toolkit to guide member states in reforming their tax systems post covid-19; calls on the commission to launch a comprehensive evaluation , to be followed by an action plan , on existing and important distortions in all tax areas that could severely impede member states in reforming their tax systems and to protect their tax base and create a resilient and fair tax mix; calls on the commission to launch legislative proposals introducing minimum standards , such as base or rate harmonisation , where needed to coordinate better taxation efforts;


### 16. welcomes the commission’s soon-to-be-published revision of the energy taxation directive17 ; calls on member states to agree to close tax exemptions for aviation and maritime fuels , increase minimum rates and restore the level playing field; calls on the commission to launch a proposal for a progressive european kerosene tax; ### 16. welcomes the commission’s soon-to-be-published revision of the energy taxation directive (etd)17 ; calls for aligning the taxation of energy products and electricity with eu environment and climate policies; agrees with the conducted evaluation that as technologies , national tax rates and energy markets have evolved over the past16 years the etd in its present form hampers the development and investment in clean energy by failing to set effective carbon prices that internalise fossil fuel’s cost on the environment; calls on member states to agree to close tax exemptions for aviation and maritime fuels , increase minimum rates and restore the level playing field; agrees and in line with the european green deal communication , the review of the directive should focus on environmental issues and therefore based on article 192 of the treaty; calls on the commission to launch a proposal for a progressive european kerosene tax;


### 17. calls on the commission to propose an sme tax simplification package that aims to make tax compliance more streamlined and easier for small and medium-sized businesses; ### 17. calls on the commission to propose an sme tax simplification package that aims to make tax compliance more streamlined and easier for small and medium-sized businesses; this package should consist of measures for making tax reporting less burdensome , encouraging member states and national tax administrations to digitalise their processes , and to explore ways for moving towards simplified e-accounting , e-declarations and even automatic declarations for smes; reminds in this regard the importance of learning from best practices in different countries and cooperative compliance;


### 18. recalls on the commission and the member states to carry out regular gender impact assessments of fiscal policies from a gender equality perspective; ### 18. recalls on the commission and the member states to carry out regular gender impact assessments of fiscal policies from a gender equality perspective focusing on the multiplier effect and implicit bias to ensure that neither direct nor indirect discrimination feature in any fiscal policies in the eu; recalls further the commission to meet its legal obligation to promote gender equality , including in its assessments of fundamental tax policy design; underlines that reviews of member states’ tax systems within the european semester , as well as country-specific recommendations , require thorough analyses in this regard;


### d. whereas the eu economy is expected to reach its pre-crisis level of quarterly output in the course of 2021 , with economic activity rebounding in all member states; ### deleted


### 1. notes that the european economy is recovering from the devastating impact of the global pandemic; remains concerned about low growth potential compared to other regions in the post-pandemic recovery; ### 1. notes that the european economy is recovering from the devastating impact of the global pandemic; remains concerned about low growth potential compared to other regions in the post-pandemic recovery and risks of recession as pandemic impact continues; underlines that economic developments will be largely determined by how successfully vaccination programmes will tame the pandemic and how quickly governments will lift restrictions;


### 2. acknowledges that despite the progress with vaccination campaigns , substantial risks to the forecasts remain from an epidemiological and economic perspective , which in turn could delay the transition to a more sustainable and future-proof economy; ### 2. acknowledges that despite the progress with vaccination campaigns , substantial risks to the forecasts remain from an epidemiological and economic perspective , which in turn could delay the transition to a more sustainable , green , inclusive and future-proof economy; is concerned that covid-19 will remain a public health concern , despite the high share of the population being vaccinated (including refreshed protection when needed , for example due to new variants);


### 3. points out that the roll-out of the recovery and resilience facility (rrf) will help to make eu economies and societies more sustainable , inclusive , resilient and better prepared for the green and digital transitions; notes that the facility , which is the centrepiece of nextgenerationeu , will provide large-scale financial support to member states of up to eur 672.5 billion in grants and loans to finance reforms and investments; ### 3. points out that the roll-out of the recovery and resilience facility (rrf) will contribute to mitigating the effects of the covid-19 crisis , fostering european solidarity , and advancing territorial cohesion; stresses that the successful implementation of the rrf will help to make eu economies and societies more sustainable , inclusive , resilient and better prepared for the green and digital transitions; notes that the facility , which is the centrepiece of nextgenerationeu , will provide large-scale financial support to member states of up to eur 672.5 billion in grants and loans to finance reforms and investments;


### 4. is pleased that , according to the commission , economic activity in the eu is expected to pick up in all member states , with acceleration as of the second half of 2021 , as containment measures are gradually relaxed and vaccination progresses , reflecting the growth impulse stemming from the implementation of the national recovery and resilience plans; remains concerned , however , that the speed of the recovery will vary across member states and regions; ### 4. is pleased that , according to the commission , economic activity in the eu is expected to pick up in all member states , with acceleration as of the second half of 2021 , as containment measures are gradually relaxed and vaccination progresses , reflecting the growth impulse stemming from the implementation of the national recovery and resilience plans; remains concerned , however , that the speed of the recovery will vary across member states and regions and that the differences in the pace of the recovery remain substantial;


### 5. notes that the general escape clause of the stability and growth pact will continue to be applied in 2022 and is expected to be deactivated as of 2023; notes , furthermore , that the decision to deactivate the general escape clause should be taken as an overall assessment of the state of the economy based on quantitative criteria , with the level of economic activity in the eu compared to pre-crisis levels as the key quantitative criterion; points out that country-specific situations will continue to be taken into account after the deactivation of the general escape clause; ### 5. notes that the general escape clause of the stability and growth pact will continue to be applied in 2022 and is expected to be deactivated as of 2023; stresses , in this regards , the volatility in the evolution of the health , social and economic situations across the eu and the euro area economy; expects , therefore , that the general escape clause will remain activated as long as severe economic and social consequences of the covid-19 pandemic persist in order to support the efforts of the member states to sustain the recovery and strengthen economic and social resilience; considers , in particular , that the decision to deactivate the general escape clause should be taken as an overall assessment of the state of the economy , with the level of economic activity in the eu compared to pre-crisis levels as a key quantitative criterion; points out that country-specific situations will continue to be taken into account after the deactivation of the general escape clause; stresses that a premature application of the current fiscal rules under the stability and growth pact would jeopardise both the post-covid recovery and the required transition to a carbon neutral economy; agrees with the european fiscal board (efb) on the importance of having a reformed fiscal framework , prior to the deactivation of the general escape clause;


### 7. is convinced that coordination of national fiscal policies remains crucial in underpinning the recovery; notes that the overall fiscal stance , taking into account national budgets and the rrf , should remain supportive in 2021 and 2022; ### 7. is convinced that coordination of national fiscal policies remains crucial in underpinning the recovery; notes that the overall fiscal stance , taking into account national budgets and the rrf , should remain supportive in 2021 and 2022 to ensure that the rrf’s impact is lasting , sustainable , and fairy distributed across societies and regions;


### 9. notes that member states with high debt should use the rrf to finance additional investment to support the recovery , while pursuing a prudent fiscal policy; stresses the importance of the member states using the potential of the rff to support the necessary structural changes and the transformation to more globally competitive , future-proof , agile industries; agrees that the growth of nationally financed current expenditure should be kept under control and be limited for member states with high debt , allowing fiscal measures to maximise support to the recovery without pre-empting future fiscal trajectories and creating a permanent burden on public finances; ### 9. notes that member states with high debt should use the rrf to finance additional investment to support the recovery; stresses the importance of the member states using the potential of the rff to support the necessary structural changes and the transformation to more green , sustainable , globally competitive , future-proof , agile economies ; calls for the spending financed by rrf loans to benefit from special treatment in the eu fiscal framework , as otherwise borrower countries will have to reduce their non-rrf spending once the currently suspended fiscal rules are re-activated; considers that the growth of nationally financed current expenditure should be countercyclical and targeted towards investments that ensure long-term environmental and social sustainability;


### 12. notes that environmental sustainability , productivity , fairness and macroeconomic stability remain the guiding principles of the eu’s economic agenda; stresses , furthermore , that the digital transformation of our societies , businesses and economies is crucial in order to increase europe’s productivity and competitiveness for a robust recovery , in line with the digital decade; ### 12. notes that environmental sustainability , productivity , fairness and macroeconomic stability remain the guiding principles of the eu’s economic agenda in line with the european green deal and the eu target of achieving climate neutrality by 2050 at the latest; stresses , furthermore , that the digital transformation of our societies , businesses and economies is crucial in order to increase europe’s productivity and competitiveness for a robust recovery , in line with the digital decade;


### 15. welcomes the fact that the updated new european industrial strategy , the european digital strategy and all the other relevant strategies set out the framework for speeding up europe’s recovery and transition towards a cleaner , more digital , and more resilient economic and industrial model , as well as for building a stronger and more resilient single market; ### 15. welcomes the fact that the updated new european industrial strategy , the european digital strategy and all the other relevant strategies set out the framework for speeding up europe’s recovery and transition towards a greener , sustainable , more digital , and more resilient economic and industrial model , as well as for building a stronger and more resilient single market;


### 16. highlights that tackling structural challenges is crucial for a sustainable recovery and continued growth , and that implementing reforms to address structural vulnerabilities is key not only to improving the ability to withstand and cope with existing challenges but also to accomplishing the twin transitions in a sustainable and fair manner; ### 16. highlights that tackling structural challenges is crucial for a long-lasting sustainable recovery and continued growth , and that implementing reforms to address structural vulnerabilities is key not only to improving the ability to withstand and cope with existing challenges but also to accomplishing the twin transitions in a sustainable , fair and inclusive manner; points towards the lack of national ownership as one the main weaknesses of the implementation of reforms aimed at addressing structural vulnerabilities; considers instrumental in addressing this ownership gap , grounding reforms on targets and objectives , rather than the precise means to achieve those , which should remain in the discretion of member states; considers that the recovery and resilient facility offers a great opportunity to improve ownership in the future economic policy coordination;


### 18. wishes that the commission had presented targeted and tailor made csrs for 2021 , instead of identical csrs for all member states , which could have focused on areas not covered by the scope of the rrf; ### 18. notes that the commission had not presented targeted and tailor made csrs for 2021 , instead of identical csrs for all member states;


### 20. regrets the fact that the commission has not promoted fiscal csrs that promote medium-term fiscal sustainability , despite the fact that the activation of the general escape clause obliges member states not to endanger fiscal sustainability in the medium term; ### deleted


### 2. notes that simplifying vat with the introduction of a single rate and revenue neutrality could reduce the standard rate in the eu by an average of 7% , thus bringing the standard rate down from 13% to 2%; ### 2. notes that simplifying vat with the introduction of a single rate and revenue neutrality could reduce the standard rate in the eu by an average of 7%; observes that a lower standard vat rate would benefit consumers , in particular low income households;


### 3. takes the view that applying a multitude of reduced rates aggravates the complexity and opacity of the tax system , facilitates fraud and increases compliance costs; ### 3. takes the view that applying a multitude of reduced rates aggravates the complexity and opacity of the tax system , facilitates fraud and increases compliance costs; notes that , instead of striving for reduced rates for environmentally friendly products or services , applying a uniform standard vat rate with mark-ups for high-polluting goods and services should be considered;


### 5. takes the view that the current diversity of reduced rates imposes particularly high compliance costs on businesses; and that compliance costs are estimated to be an average of 2.5% of company turnover and vary considerably from member state to member state22 ; ### 5. takes the view that the current diversity of reduced rates imposes particularly high compliance costs on businesses; and that compliance costs are estimated to be an average of 2.5% of company turnover and vary considerably from member state to member state22; also notes that digitalisation can contribute greatly to the reduction of compliance costs for businesses;


### 6. observes that smes must pay proportionately higher compliance costs , as these costs are fixed and independent of company size , and that high compliance costs constitute a barrier to entry into the eu internal market; takes the view , therefore , that differentiated vat regimes within the eu may act as a disincentive to exports; ### 6. observes that smes must pay proportionately higher compliance costs , as these costs are fixed and independent of company size , and that high compliance costs constitute a barrier to entry into the eu internal market; takes the view , therefore , that differentiated vat regimes within the eu create an unlevel playing field between large multinational companies and smes ,however the empirical evidence on the effect of vat systems on international trade is inconclusive;


### 8. observes that the wide variety of rates causes price distortion in the internal market , creating incentives for cross-border purchases and giving rise to increased tax competition between member states; recalls that companies need clear and unambiguous vat rules to encourage cross-border business and reduce their administrative burdens; ### 8. observes that the wide variety of rates causes price distortion in the internal market , creating incentives for cross-border purchases and giving rise to increased tax competition between member states; notes that in particular the diversification of vat rates creates an incentive to exploit price differences across countries by shifting consumption to member states with lower vat rates and distort revenue collection by governments and thus potentially lead to tax competition among member states; recalls that companies need clear and unambiguous vat rules to encourage cross-border business and reduce their administrative burdens;


### 9. stresses that a well-designed vat system is neutral and should not affect trade , but that in practice this principle is difficult to verify at global level given the application of vat exemptions , the ineffectiveness of refund systems , the wide variety of rates – incurring higher compliance costs – and the fact that vat has superseded income taxes with a view to encouraging trade; ### 9. stresses that a well-designed vat system is neutral and should not affect trade , but that in practice this principle is difficult to verify at global level given the application of vat exemptions , the ineffectiveness of refund systems , the wide variety of rates – incurring higher compliance costs;


### 10. observes that the application of reduced rates does not systematically give rise to permanent price reductions for the consumer; that the effectiveness of a reduced rate depends on a number of factors , such as the extent to which businesses pass it on to consumers , its duration over time , the size of the reduction and the complexity of the rate system; that the passing-on of reductions in their entirety is therefore a random process and should not be the basis for policy-making; that it is impossible to target low-income households; ### 10. observes that the application of reduced rates does not systematically give rise to permanent price reductions for the consumer; that the effectiveness of a reduced rate depends on a number of factors , such as the extent to which businesses pass it on to consumers , its duration over time , the size of the reduction and the complexity of the rate system; that the passing-on of reductions in their entirety is therefore a complex process and should not be undertaken without a sound impact assessment; ; notes , however , that evidence shows that reduced vat rates with the aim of supporting low-income households (such as reduced rates on food) make the vat more progressive; also notes that while existing reduced and zero vat rates are of greater proportional benefit to low-income households in the eu (measured as the proportion of expenditure) , they are typically of greater benefit to high-income households in absolute (cash) terms;


### 11. recalls that for it to have a leverage effect , green taxation must be inclusive , strive for social equity and not undermine businesses’ international competitiveness; observes that the effectiveness of reduced rates in promoting this type of goods and services or , in a broader sense , merit goods (e.g. culture , health , biodiversity) is chiefly a function of the extent to which they are used to promote such goods; ### 11. observes that the effectiveness of reduced vat rates in promoting environmentally friendly goods and services is still difficult to assess due to a lack of empirical evidence , although in certain case studies and according to certain models positive impacts can be measures; urges , however , that to promote environmentally friendly consumption it is primary importance for member statesto phase out all zero-rates and reduced rates on harmful environmental goods and services; invites the commission to consider the idea of increased vat rates compared to standard vat rate for environmentally harmful products to achieve the eu’s climate objectives enshrined in the green deal;


### 12. stresses that reduced rates are not an effective way of achieving social or environmental objectives since they incur high costs for governments owing to the size of the rate gap , reduced tax revenues , increased administrative costs , costly checks and inspections , pressure from lobby groups , compliance costs , economic distortions or even tax evasion , and the difficulty of reaching the target groups; ### 12. stresses that evidence suggests that reduced vat rates are a less effective way of achieving social or environmental objectives since they incur considerable costs for governments owing to the size of the rate gap , reduced tax revenues , increased administrative costs , costly checks and inspections , pressure from lobby groups , compliance costs , economic distortions or even tax evasion , and the difficulty of reaching the target groups;


### 13. takes the view that direct tax incentives , such as direct grants or tax credits targeting specific consumers and producers , are more effective , flexible , visible and cost-effective tools for achieving these social and environmental objectives; ### 13. takes the view that direct tax measures , such as progressive personal income tax rates and carbon taxes and incentives , such as direct grants or tax credits targeting specific consumers and producers , are more effective , flexible , visible and cost-effective tools for achieving these social and environmental objectives;


### 14. stresses that a uniform vat system , combined with a direct tax incentive tool such as the income-based tax credit scheme for low-income households , together with a raft of social reforms , would be a winning strategy; recalls that new zealand has a flat-rate vat system and applies tax credit for low-income households; points out that flat-rate subsidies and information campaigns are an option for the promotion of merit goods; ### 14. stresses that a uniform vat system , combined with a direct tax incentive tool such as the income-based tax credit scheme for low-income households along with non-linear progressive personal income tax rates , together with a raft of social reforms and environmental taxes such as carbon taxes , would be a winning strategy for an economic effective social and green holistic tax system; recalls that new zealand has a flat-rate vat system and applies tax credit for low-income households; points out that flat-rate subsidies and information campaigns are an option for the promotion of merit goods; concludes that for redistributional purposes , the progressivity of the overall tax system is decisive , even if the vat is highly regressive , provided the tax system as a whole is progressive , distributional goals can be reached; highlight that increasing the existing reduced rates without compensation measures would disproportionately hurt low-income households;


### 15. recalls that vat revenue is one of the chief sources of public revenue , accounting for some 21% of total tax revenue in the eu on average; that the vat gap stands at 10% on average; and that vat also constitutes an own resource for the eu budget; stresses that any reduction in the vat base leads to less revenue for public finances; calls on national tax authorities to take initiatives to reduce the vat gap in order to help lift member states out of the current socio-economic crisis; ### 15. recalls that vat revenue is one of the chief sources of public revenue , accounting for some 21% of total tax revenue in the eu on average; that the vat gap stands at 10% on average; and that vat also constitutes an own resource for the eu budget; stresses that any reduction in the vat base leads to less revenue for public finances; calls on national tax authorities to take initiatives to reduce the vat gap in order to help lift member states out of the current socio-economic crisis and to the benefit of eu own resources;


### 16. endorses the findings of the diw econ study which stresses that on average the standard rate was applied to 71% of the total tax base in the member states in 2019; points out that diversified vat systems impose costs on businesses , particularly smes via increased compliance costs , create distortions in the internal market and trade , and incur costs on government through lost revenue; adds that reduced rates are an insufficient means of achieving revenue-distribution or environmental objectives; ### 16. stresses that on average the vat standard rate was applied to 71% of the total tax base in the member states in 2019; points out that diversified vat systems impose costs on businesses , particularly smes via increased compliance costs , create distortions in the internal market and trade , and incur costs on government through lost revenue; adds that reduced rates are a less effective means of achieving revenue-distribution; notes , however , that low-income households do benefit from reduced vat rates although the distributional effects from reduced rates are rather small;


### 17. notes the difficulties in reducing the vat gap between member states owing to the need to maintain a number of vat exemptions for certain goods and services and the willingness of member states to maintain reduced rates of at least 5%; acknowledges that member states need to conserve the flexibility to set their own vat rates given the importance of this tax as a budgetary instrument; ### 17. notes the difficulties in reducing the vat gap between member states owing to the need to maintain a number of vat exemptions for certain goods and services and the willingness of member states to maintain reduced rates of at least 5%; acknowledges that member states need to conserve the flexibility to set their own vat rates given the importance of this tax as a budgetary instrument; calls on the commission to map all the different tax mixes between member states to better understand the distortive nature of uncoordinated and unharmonised taxsystems;


### 18. calls for a simplified vat system with limits on exemptions and non-standard rates to be introduced with a view to promoting competitiveness; ### 18. calls for a simplified vat system with limits on exemptions and non-standard rates to be introduced; highlight that increasing the existing reduced rates without compensation measures would disproportionately hurt low-income households; rejects the idea of a ‘negative list’ as proposed by the european commission in its 2018 proposal and rather supports the current negotiated ‘positive list’ in the council; furthermore supports the proposal by the former portuguese council presidency to phase out all zero-rates and reduced rates on environmentally harmful goods and services such as on fossil fuels , chemical pesticides and chemical fertilisers at member states level; urges members states to conclude quickly on the proposal for a revised directive on vat rates;


### 19. stresses that the vat gap is chiefly attributable to the ineffectiveness of enforcement and control measures , particularly those against tax evasion and avoidance and aggressive tax planning; ### 19. stresses that the vat gap is chiefly attributable to the ineffectiveness of enforcement and control measures , particularly those against tax evasion and avoidance and aggressive tax planning; notes that tax competition and low tax morale also contribute to the vat gap; observes that low redistributive tax system contributes to a low tax morale;


### 20. recalls that the effectiveness of reduced rates as a policy tool must always be assessed in the specific context of other existing policy tools; adds that reduced rates are often complementary to existing social and environmental policy tools; and that direct tax incentives are instruments that better target low-income households and are generally less costly; ### 20. recalls that the effectiveness of reduced rates as a policy tool must always be assessed in the specific context of other existing policy tools; adds that reduced rates are often complementary to existing social and environmental policy tools; and that direct tax policies such as a tax-free threshold along with progressive tax rates is an instrument that more effectively targets low-income households , guarantees better redistribution and is generally less costly;


### 21. stresses the need to move to a definitive vat system based on the principle of taxation in the country of destination; calls on the council to adopt the proposal for a directive of 25 may 2018; ### 21. stresses the need to move to a definitive vat system based on the principle of taxation in the country of destination; urges on the council to adopt the proposal for a directive of 25 may 2018 and condemns those member states blocking progress;


### 1. welcomes the entry of bulgaria and croatia into the banking union; ### 1. welcomes the entry of bulgaria and croatia into the banking union; stresses that before bulgaria and croatia enter the euro , they should not only meet the formal entry criteria for debt levels and price stability , but also make significant progress in fighting money laundering and financial crime; emphasizes that a comprehensive assessment of the banking sector should be conduct prior to the accession to the common currency , including on less significant institutions;


### 3. considers that banks’ response to the current crisis demonstrates that the regulatory reforms in the past decade , as well as the institutional set-up , have resulted in better-capitalised and less-leveraged banks; ### deleted


### 5. underlines the vital contribution to addressing the crisis of public guarantee schemes , moratoria on loan repayments for borrowers in financial difficulty , the central banks’ liquidity programmes and the ecb’s targeted longer-term refinancing operations (tltro) and pandemic emergency purchase programme (pepp); ### 5. underlines the vital contribution to addressing the crisis of public guarantee schemes , moratoria on loan repayments for borrowers in financial difficulty , the central banks’ liquidity programmes and the ecb’s targeted longer-term refinancing operations (tltro) , asset purchase programme (app) and pandemic emergency purchase programme (pepp);


### 6. notes the ‘quick fix’ to the capital requirements regulation31 extending transitional arrangements in order to support banks’ lending capacity32 ; ### 6. regrets that the ‘quick fix’ to the capital requirements regulation extending transitional arrangements in order to support banks’ lending capacity , postponing the application of the leverage ratio buffer , introducing more favourable treatment of publicly guaranteed loans and frontloading the sme and infrastructure factors , has been set without any corresponding obligations; calls on the commission to assess the time horizon of such temporary measures as well as the introduction of a legally binding dividend and buy-back ban as a supervisory tool during times of crisis;


### b. whereas the completion of the banking union beyond its two pillars , the single supervisory mechanism (ssm) and the single resolution mechanism (srm) , is pending; ### b. whereas the banking union remains incomplete as long as it lacks a european deposit insurance scheme (edis);


### c. whereas the lack of a solution to the treatment of sovereign debt exposures and national options and discretions persists , undermining the european dimension of the banking union; ### c. whereas the national options and discretions persist , undermining the european dimension of the banking union;


### f. whereas prudential and anti-money laundering supervision is necessary; ### f. whereas prudential and anti-money laundering supervision is necessary and should be further strengthened;


### a. whereas the unprecedented impact and magnitude of the covid-19 crisis on the economy has led to a decrease in tax revenues and an increase in fiscal expenditures to protect society and the economy , and is leading to a sharp increase in government debt; whereas tax fraud and tax evasion undermines government revenues , as well as the sustainability of public finances and taxation systems; whereas it is paramount to keep taxes low to support the growth of the economy; ### a. whereas the unprecedented impact and magnitude of the covid-19 crisis on the economy has led to a decrease in tax revenues and an increase in fiscal expenditures to protect society and the economy , and is leading to a sharp increase in government debt; whereas tax avoidance , tax fraud and tax evasion undermines government revenues , as well as the sustainability of public finances and taxation systems; whereas the economic recovery and the challenges related to the climate crisis , ageing population , the ecological transition and the digitisation of the economy involve very profound changes and increase the need to mobilise more resources and re-evaluate current taxation policies , in particular the many loopholes embedded in complex national taxation polices , so that this transition is fair;


### b. whereas a swift recovery requires a strong economic and fiscal policy response ensuring , inter alia: (i) an effective level playing field for businesses , including less red tape to promote both domestic trade and trade within the single market , supported by a simple and more predictable tax environment; (ii) securing tax revenues for member states to finance the recovery and reduce debt to gdp and (iii) fair taxation of businesses and citizens , enhancing both trust in society and fair competition; ### b. whereas a swift recovery requires a strong economic and fiscal policy response ensuring , inter alia: (i) an effective level playing field for businesses , including less red tape to promote both domestic trade and trade within the single market , supported by a simple , fairer and more predictable tax environment; (ii) securing tax revenues for member states to finance the recovery , the ecological transition to a carbon-neutral economy and reduce debt to gdp and (iii) fair taxation of businesses and citizens , enhancing tax morale and trust in society; whereas tax morale is generally higher in countries that tax more heavily , which is evident in the willingness of citizens to pay tax in return for effective public services1a;


### e. whereas current international corporate tax rules are no longer suitable in the context of digitalisation and globalisation of the economy; whereas developments of digitalisation create a challenge in terms of traceability of economic operations and taxable events; ### e. whereas current international corporate tax rules are no longer suitable in the context of digitalisation and globalisation of the economy; whereas developments of digitalisation and the increase of intangible assets in value chains create a challenge in terms of traceability of economic operations and taxable events and facilitate tax avoidance practices;


### f. whereas corporate taxation should be guided by the principle of taxing profits where they are generated , a coordinated approach to the corporate taxation system across the union could further enable the tackling of unfair competition caused by harmful tax practices that distort the functioning of the single market and often lead to misallocation of resources; ### f. whereas corporate taxation should be guided by the principle of taxing profits where they are generated , a harmonised and coordinated approach to the corporate taxation system across the union could put an end to tax competition and harmful tax practices in the corporate income tax field and therefore secure a well-functioning single market;


### g. whereas increased transparency in the area of corporate taxation can improve tax collection and is also necessary to strengthen fair competitiveness in the single market , which will make the work of tax authorities more efficient; whereas the use of technology and digitalisation focused on a more efficient use of the available data can support efficiency and transparency of tax authorities and reduce the costs of compliance and increase the trust of the public; ### g. whereas increased transparency in the area of corporate taxation can improve tax collection , increase tax compliance and is also necessary to strengthen fair competitiveness in the single market , which will make the work of tax authorities more efficient; whereas the use of technology and digitalisation focused on a more efficient use of the available data can support efficiency and transparency of tax authorities and reduce the costs of compliance and increase the trust of the public; whereas the use of technology and digitalisation can also facilitate the taxation of mobile tax bases;


### 1. welcomes the commission's action plan and supports its thorough implementation; observes that the majority of the 25 actions are related to vat , which is appropriate due to the high level of revenue losses in the area of vat; considers however that an impact assessment should be carried out , before presenting concrete legislative proposals to better apprehend the potential effects on taxpayers and businesses; ### 1. welcomes the commission's action plan and supports its thorough implementation; observes that the majority of the 25 actions are related to vat , which is appropriate due to the high level of revenue losses in the area of vat; considers however that an impact assessment should be carried out , before presenting concrete legislative proposals to better apprehend the potential effects on taxpayers and businesses; is concerned that urgently needed vat reforms such as the definitive vat regime and coordination of rates remain blocked in council due to unanimity in tax matters;


### 2. believes that the commission’s decision to carry out initiatives aimed at enhancing cooperation among tax authorities and increased harmonisation of procedural rules across the single market is of the highest importance; welcomes the commission’s initiative for the ‘eu cooperative compliance programme’; ### 2. believes that the commission’s decision to carry out initiatives aimed at enhancing cooperation among tax authorities and increased harmonisation of procedural rules across the single market is of the highest importance; welcomes the commission’s initiative for the ‘eu cooperative compliance programme’; welcomes and looks forward to the commission’s proposals to harmonise withholding tax procedures and tax residence criteria;


### 4. recalls that any tax measures , temporary or not , should foster and not hamper the competitiveness of european businesses; stresses that the reporting requirements should not generate higher administrative costs for economic actors , notably for small and medium-sized enterprises (smes); notes that to effectively address lost tax revenues , better quality and possible higher quantities of data may be needed , but only data effectively used , and collected from taxpayers only once with utmost security , should be collected; notes that data should aim to simplify various obligations of taxpayers , while artificial intelligence (ai) and various softwares should be used to maximise the effectiveness of the use of data; ### 4. stresses that tax reporting requirements should avoid generating significantly higher administrative costs for economic actors , notably for small and medium-sized enterprises (smes); notes that to effectively address lost tax revenues , better quality and possible higher quantities of data may be needed , but only data effectively used , and collected from taxpayers in line with taxpayers' rights should be collected; notes that data should aim to simplify various obligations of taxpayers , while artificial intelligence (ai) and various softwares should be used to maximise the effectiveness of the use of data;


### 5. is of the opinion that better estimates of overall tax losses in the union are essential for efficient proposals on ways to effectively reduce tax losses; ### 5. is of the opinion that better estimates of overall tax losses in the union are essential for efficient proposals on ways to effectively reduce tax losses; highlights that better availability of data , by companies , individuals and tax administrations , can significantly contribute to better estimates; deplores that certain member states such as ireland and the netherlands do not disclose their cbcr data fully at national level and in particular in the oecd corporate tax statistics database; deplores further that member states have not shared the needed information with the european parliament in the framework of the dac implementation report; welcomes the adoption of the public country-by-country reporting proposal;


### 6. recalls that tax transparency and certainty based on clear respective rights and duties is the main principle on which to build mutual trust between taxpayers; supports , in that context , the formalisation of the charter on taxpayer’s rights; believes that further development and the identification of gaps in effective european dispute resolution mechanism need to be considered; ### 6. recalls that tax transparency , fairness and certainty based on clear respective rights and duties is the main principle on which to build mutual trust between taxpayers and tax administrations; supports , in that context , the formalisation of the charter on taxpayer’s rights; believes that further development and the identification of gaps in effective european dispute resolution mechanism need to be considered;


### 7. notes that the union decision-making process is not promoting change , as tax policy is a national prerogative and subject to unanimity; regrets that the current situation sometimes leads to an uneven or inconsistent application of tax regulations; calls on the commission and the member states to ensure more harmonised and consistent tax rules and their implementation , to protect the functioning of the single market and to assure the principle of “taxing where profit is generated”; ### 7. notes that the union decision-making process is not promoting change , as tax policy is a national prerogative and subject to unanimity; regrets that the current situation sometimes leads to an uneven or inconsistent application of tax regulations; calls on the commission and the member states to ensure more harmonised and consistent tax rules and their implementation , to protect the functioning of the single market and to assure the principle of “taxing where profit is generated”; deplores the fact that proposals such as ccctb , revision of the interest and royalty directive and the reform of the code of conduct on business taxation have remained blocked in the council;


### 8. takes note of the existing limits on decision making in the council and calls for exploring all legal options as provided in the treaties on taxation especially in order to ensure functionality of the single market and preserve union competitiveness in the global market; ### 8. takes note of the existing limits on decision making in the council and calls for exploring all legal options as provided in the treaties on taxation especially in order to ensure functionality of the single market and preserve union competitiveness in the global market; recalls in this respect the commission’s communication towards more efficient and democratic decision making in eu tax policy; deplores that article 116 tfeu , although suggested in the commission’s action plan , has not yet been used in tax matters;


### 11. highlights that the current global tax environment is outdated , and can only be fully addressed on a global level; considers that a multilateral agreement negotiated oecd/g20 inclusive framework on beps is a unique opportunity to make international tax architecture more consistent with the development of the economy by further addressing the distortions of fair competition in the market , which was accentuated during the covid-19 crisis and highlighted problems related to the taxing of large multinational enterprises (mnes); ### 11. highlights that the current global tax environment is outdated; welcomes the multilateral agreement negotiated oecd/g20 inclusive framework on beps ;


### 12. welcomes the efforts of the commission to address the problem at least partially by introducing various initiatives , but stresses the high importance of the union in contributing to the success of global negotiations towards the ongoing necessary reforms; ### deleted


### 13. notes that the reduction of the estimated gap10 due to corporate tax avoidance at around eur 35 billion per year from the previous commission estimations of eur 50-70 billion before anti-beps measures were introduced and the correlation between an improvement and the legislative efforts on tax avoidance carried out by the commission; stresses that situations where some firms are still able to reduce their tax bill is undermining fair competition in the single market and often harming the competitiveness of smes; ### 13. notes that the reduction of the estimated gap10 due to corporate tax avoidance at around eur 35 billion per year from the previous commission estimations of eur 50-70 billion before anti-beps measures were introduced and the correlation between an improvement and the legislative efforts on tax avoidance carried out by the commission; stresses that situations where some firms are still able to reduce their tax bill is undermining fair competition in the single market and often harming the competitiveness of smes; stresses further that special regimes such as lower corporate income tax rates push high-income earners to incorporate avoiding progressive personal income taxation; notes that the corporate sector now accounts for a greater proportion of the overall economy due to a race to the bottom in corporate tax rates and the shift from personal income taxation to corporate income taxation;


### 14. welcomes the two-pillar agreement reached at the g7/g20 levels on the allocation of taxing rights and the application of a minimum effective tax rate of at least 15% on the global profits of mnes; notes the need for effective implementation; calls on the commission to make the necessary legislative proposals to implement the agreement into union law as quickly as possible after the finalisation of the technical work on the oecd approach; ### 14. welcomes the two-pillar agreement reached at the g7/g20 levels on the allocation of taxing rights and the application of a minimum effective tax rate of at least15% on the profits of mnes; notes the need for effective implementation; calls on the commission to make the necessary legislative proposals to implement the agreement into union law as quickly as possible after the finalisation of the technical work on the oecd approach; invites the commission to consider expanding the scope by lowering the threshold as permitted under the oecd/g20 agreement , not applying the carve-out in intra-eu situations and inserting a broad revision clause in the directive implementing the agreement;


### 15. recalls that future union policy options and political choices in the area of business taxation should be based on tax fairness , efficiency and transparency , leading to fairly shared taxes for all types of multinational companies , while reducing costs of compliance for taxpayers , as well as removing sources of business distortions in the union single market , trade and investments; ### 15. recalls that future union policy options and political choices in the area of business taxation should be based on overall tax fairness , european green deal objectives , efficiency and transparency , leading to sustainable , redistributive and fair tax mixes and fairly shared taxes for all types of multinational companies , while reducing costs of compliance for taxpayers , as well as removing sources of business distortions in the union single market , trade and investments;


### 16. supports the rationale of the befit , with the view to design a new and single union corporate tax rulebook , based on a formulary apportionment and a common tax base of income taxation for businesses , which will be providing clarity and predictability for companies , reflecting the consensus reached in the oecd pillar 1 and pillar 2 negotiations; ### 16. supports the rationale of the befit , with the view to design a new and single union corporate tax rulebook , based on a fair , comprehensive and effective formulary apportionment and a common tax base of income taxation for businesses , which will be providing clarity and predictability for companies , reflecting the consensus reached in the oecd pillar 1 and pillar 2 negotiations; warns that a significant shift in the formula to the sales component and the value attributed to intangible assets has the potential to undermine the fairness of the proposal;


### 18. considers that the new corporate tax agenda should include a mechanism to address the debt-equity bias through an incentive system , helping to support the resilience of companies in adverse economic circumstances in the future; ### 18. considers that the new corporate tax agenda should include a mechanism to address the debt-equity bias through a revision of the first anti-tax avoidance directive and in particular the interest limitation rules;


### 19. supports , for the purposes of tax transparency , the collection of regularly updated data on the effective corporate tax rates paid by the union’s largest companies on their generated profits within the union , such a mapping should be used to assess the efficiency of the tax framework and rules in place; ### 19. supports , for the purposes of tax transparency , the collection of regularly updated data on the effective corporate tax rates paid by the union’s largest companies on their generated profits within the union , such a mapping should be used to assess the efficiency of the tax framework and rules in place; welcomes and looks forward to the upcoming proposal for the annual publication of the effective corporate tax rate of certain large companies with operations in the union; calls on the commission to use article 50 tfeu as a legal basis for such a proposal amending the directive 2013/34/eu as regards disclosure of income tax information by certain undertakings and branches;


### 20. requests that the commission submit by 2022/2023 one or more legislative proposals following the recommendations set out in the annex hereto; ### 20. requests that the commission submit by 2022/2023 one or more legislative proposals following the recommendations set out in this report and the annex hereto;


### c. reduction of tax gap and compliance costs ### c. reduction of tax gap , and compliance costs and the european green deal ,


### a. whereas eu taxpayers held eur 1.5 trillion offshore in 2016 , resulting in an average tax revenue loss of eur 46 billion in the eu as a result of tax evasion by individuals12 ; ### a. whereas conservative estimates of the scale of eu tax revenues lost every year due to corporate tax avoidance alone range from €50-70 billion to almost €160-190 billion (when including special tax arrangements and tax collection inefficiencies)11a and eu taxpayers held eur 1.5 trillion offshore in 2016 , resulting in an average tax revenue loss of eur 46 billion in the eu as a result of tax evasion by individuals12 ;


### 2. notes , however , that some types of income and assets are still excluded from the scope , which presents a risk of circumventing tax obligations; calls on the commission to assess the need and the most appropriate way to include the following ownership information , items of income and non-financial assets in the automatic exchange of information (aeoi): (a) the beneficial owners of immovable property and companies; (b) capital gains related to immovable property and capital gains related to financial assets , in particular to find ways for tax administrations to be better informed to identify realised capital gains; (c) non-custodial dividend income; (d) non-financial assets such as cash , art , gold or other valuables held at free ports , customs warehouses or safe deposit boxes; and (e) ownership of yachts and private jets; ### 2. notes , however , that some types of income and assets are still excluded from the scope , which presents a risk of circumventing tax obligations; calls on the commission to assess the need and the most appropriate way to include the following ownership information , items of income and non-financial assets in the automatic exchange of information (aeoi): (a) the beneficial owners of immovable property and companies; (b) capital gains related to immovable property and capital gains related to financial assets , in particular to find ways for tax administrations to be better informed to identify realised capital gains; (c) non-custodial dividend income; (d) non-financial assets such as cash , art , gold or other valuables held at free ports , customs warehouses or safe deposit boxes; and (e) ownership of yachts and private jets; and (f) accounts at larger peer-to-peer lending , crowdfunding and similar platforms;


### 3. observes that the effectiveness of dac1 is seriously constrained by the fact that member states are only required to report at least two categories of income; calls on the commission to make it mandatory to report on all categories of income and assets in the scope; ### 3. observes that the effectiveness of dac1 is seriously constrained by the fact that member states are only required to report at least two categories of income; calls on the commission to make it mandatory to report on all categories of income and assets in the scope; calls on member states to develop effective and accessible registries for the purposes of eoi; notes that such efforts will also benefit domestic tax collection;


### 4. observes that the definition of reporting financial institutions (fis) and types of accounts that need to be reported in dac2 involves a risk of circumvention and increased bureaucracy; calls for an assessment by the commission of the need to extend the reporting obligations to other relevant types of fis , to review the definition of excluded accounts and to remove the thresholds applicable to pre-existing entity accounts; ### 4. observes that the definition of reporting financial institutions (fis) and types of accounts that need to be reported in dac2 involves a risk of circumvention and increased bureaucracy; calls for an assessment by the commission of the need to extend the reporting obligations to other relevant types of fis , to reconsider the qualification of closely-held managed investment entities as fis , to review the definition of excluded accounts and to remove the thresholds applicable to pre-existing entity accounts; reminds that with adequate it systems in place a practice of zero exemptions and zero thresholds can contribute to less bureaucracy; calls on the commission to introduce the obligation for fis , where there is no information to report , to file nil returns;


### 5. observes that dac3 contains certain blind spots; therefore calls for the scope of eoi under dac3 to be widened to include informal arrangements , post-transaction agreements , natural persons and rulings which are still valid , but which were issued , amended or renewed before 2012; ### 5. observes that dac3 contains certain blind spots and might have perverse effects such as tax administrations not disclosing acbrs if these are too favourable or tax administrations resorting to informal arrangements to avoid exchange; therefore calls for the scope of eoi under dac3 to be widened to include informal arrangements , not “advance” (e.g. post-transaction agreements or after filing the returns) apas and acbrs , natural persons and rulings which are still valid , but which were issued , amended or renewed before 2012; regrets that earlier calls by the european parliament in this regard have been ignored so far;


### 6. notes that the information exchanged is of limited quality; calls for stronger enforcement procedures at member state level; calls on the commission to include on the spot visits in member states and to assess the effectiveness of their monitoring schemes; calls on the member states to establish a system of quality and completeness checks of dac data , as well as procedures for the audit of reporting obliged entities regarding the quality and completeness of data sent; ### 6. notes that the information exchanged is of limited quality; observes that joint accounts pose certain difficulties to fis , is concerned that inaccurate or outdated information on tax residency held by fis and the abuse through multiple residencies may lead to failure to eoi where this would be required; deplores the use of golden visa and passports to circumvent eoi and reiterates its call to phase out all existing schemes; calls on the commission to extend its infringement proceedings to all member states offering golden visas; calls for stronger enforcement procedures at member state level; calls on the commission to include on the spot visits in member states and to assess the effectiveness of their monitoring schemes; calls on the member states to establish a system of quality and completeness checks of dac data , as well as procedures for the audit of reporting obliged entities regarding the quality and completeness of data sent;


### 9. observes that increasingly complex structures are being used to conceal the ultimate beneficial owners and therefore thwart the effective implementation of aml rules; believes there should be no threshold for reporting the beneficial owners; ### 9. observes that increasingly complex structures are being used to conceal the ultimate beneficial owners and therefore thwart the effective implementation of aml rules; believes there should be no threshold for reporting the beneficial owners; recalls its view that beneficial ownership of trusts should have the same level of transparency as companies under amld5 , while ensuring appropriate safeguards;


### 11. notes with concern that the global forum has recently assessed the legal implementation of the common reporting standard (crs)14 and deplores the fact that 10 member states are not fully compliant; ### 11. notes with concern that the global forum has recently assessed the legal implementation of the common reporting standard (crs)14 referred to as dac2 in the eu , and deplores the fact that 10 member states are not fully compliant according to the global forum peer review , stresses that romania does not have the domestic legal framework in place; calls the commission to closely monitor member states and launch infringement procedures until all member states are fully compliant; looks forward to the global forum peer review of the practical enforcement of the crs and calls on the commission and member states to prepare diligently for this process;


### 12. notes that the sharing of valid taxpayer identification numbers (tins) is crucial for efficient eoi processes; ### 12. notes that only lithuania and ireland appear to include a tin , as recognised by the receiving country; notes further that the sharing of valid taxpayer identification numbers (tins) is crucial for efficient eoi processes; notes that the tins of corporations should be reported as well , in order to further facilitate the matching of tax relevant information;


### 13. calls on the commission to create a validation tool for tins; calls on the member states to ensure more systematic analysis of unmatched dac1 and dac2 data , and to introduce procedures for the systematic risk analysis of information received; ### 13. calls on the commission in close collaboration with member states to create a validation tool for tins; notes that such a validation tool would increase the reporting effectiveness of fis significantly and as such decrease the compliance costs for these institutions; calls on the commission tore-explore the creation of a european tin; calls on the member states to ensure more systematic analysis of unmatched dac1 and dac2 data , and to introduce procedures for the systematic risk analysis of information received;


### 14. regrets the fact that information exchanged on request (eoir) has often been found to be incomplete and required further clarifications; calls on the commission to assess indications that eoir is unsatisfactory with several third countries , including switzerland; ### 14. regrets the fact that information exchanged on request (eoir) has often been found tobe incomplete and required further clarifications; regrets that in the framework of the eoir authorities often take up to six months and longer to provide information from the date of receipt of the request; notes with regret that there are no time limits for any follow-up exchanges which creates the potential for further delay; calls on the commission to revise this provision , including for follow-up requests , to no later than 3 months; suggests to grant the commission the mandate to systematically assess the degree of cooperation from third countries; calls on the commission to assess indications that eoir is unsatisfactory with several third countries , including switzerland;


### 15. deplores the fact that one member state , malta , has received an overall ‘partially compliant’ score in the peer review by the global forum for eoir; regrets the fact that material deficiencies have been identified in 18 member states15 ; ### 15. deplores the fact that one member state , malta , has received an overall ‘partially compliant’ score in the peer review by the global forum for eoir , meaning the eoir standard is only partly implemented leading to significant practical effects; notes that 19 member states are not fully compliant on ‘ownership and identity information’14a; notes that 6 member states are not fully compliant on ‘accounting information’14b; notes that 5 member states are not fully compliant on ‘banking information’14c; notes that 7 member states are not fully compliant on ‘access to information’14d; notes that 3 member states are not fully compliant on ‘rights and safeguards’14e; notes that 5 member states are not fully compliant on ‘eoi mechanisms’14f; notes that 3 member states are not fully compliant on ‘confidentiality’14g; notes that 3 member states are not fully compliant on ‘rights and safeguards’14h; notes that 9 member states are not fully compliant on ‘quality and timeliness of responses’14i; notes that in summary only 8 member states no material deficiencies were identified14j; regrets the fact that material deficiencies have been identified in 18 member states15; deeply regrets that certain member states score a low rating on particular issues such as ownership and identity information; calls on member states to achieve a compliant rating at the next peer review; notes that the underperforming of member states seriously undermines the eu’s credibility in fighting tax evasion and avoidance internationally; calls the commission to launch infringement procedures until all member states are fully compliant;


### 16. notes that the use of information under the dac for non-tax matters requires prior authorisation from the sending member state , which is not always granted; insists that the use of information exchanged under the dac should always be authorised for purposes other than tax matters where this is allowed under the laws of the receiving member state; ### 16. notes that the use of information under the dac for non-tax matters requires prior authorisation from the sending member state , which is not always granted although this information could be useful to increase the efficiency of criminal and other investigations; insists that the use of information exchanged under the dac should always be authorised for purposes other than tax matters where this is allowed under the laws of the receiving member state;


### 17. notes with great concern that information is underreported , and what is being reported is underused; notes further that little monitoring of the system’s effectiveness takes place; regrets the fact that the data on eoi under dac provisions , which is publicly available , is insufficient to adequately assess the evolution of information exchanges and their effectiveness; ### 17. notes with great concern that there is not enough evidence to assess the quality of reporting under dac1 and dac2 provisions , due to the fact only few member states systematically carry out quality checks on the data exchanged under dac1 and dac2; notes with great concern that information is underreported , and what is being reported is underused; notes further that little monitoring of the system’s effectiveness takes place; regrets the fact that the data on eoi under dac provisions , which is publicly available , is insufficient to adequately assess the evolution of information exchanges and their effectiveness;


### 18. notes that there is no common eu framework for monitoring the system’s performance and achievements; ### 18. notes that there is no common eu framework for monitoring the system’s performance and achievements which increases the risk that reported data is incomplete or inaccurate; notes moreover that only few member states have set up and apply procedures to audit information submitted by financial institutions under dac2;


### 19. calls on the commission and the member states to establish a common framework for measuring the impact and the cost-benefits of the dac; calls on the commission to publish annually a summary of the information received by member states; ### 19. calls on the commission and the member states to establish a common framework for measuring the impact and the cost-benefits of the dac and make the dac exchanges fully auditable and traceable from origin to use of the data , by including an identifier in every dataset; calls on the commission to publish annually a summary of the information received by member states , taking into account taxpayers rights and confidentially; notes that the information communicated to the commission should not be seen as strictly confidential if the information cannot be attributed to single taxpayers; reiterates that the commission should be entitled to produce and publish reports and documents , using the information exchanged in an anonymised manner , so as to take into account the taxpayers’ right to confidentiality and incompliance with regulation (ec) no 1049/2001 regarding public access to european parliament , council and commission documents;


### 20. calls on the member states to communicate the statistics , tax revenue gains and all other relevant information to properly assess the effectiveness of all exchanges to the commission on an annual basis , and , in the case of eoir , requests that the information provided be disaggregated on a country-by-country basis; ### 20. stresses that the 2019 evaluation carried out by the commission demonstrated the need for consistent monitoring of the effectiveness the dac framework; calls on the member states to communicate the statistics , tax revenue gains and all other relevant information to properly assess the effectiveness of all exchanges to the commission on an annual basis , and , in the case of eoir , requests that the information provided be disaggregated on a country-by-country basis; calls on the commission to continue to properly monitor and evaluate the effectiveness of eoi , therefore request a new comprehensive evaluation by january 2023;


### 21. deplores the lack of reciprocity under the foreign account tax compliance act; calls on the commission and the member states to enter into new negotiations with the united states in the oecd framework in order to achieve full reciprocity in a commonly agreed and strengthened crs framework; ### 21. deplores the lack of reciprocity under the foreign account tax compliance act; observes that the united states is becoming a significant enabler of financial secrecy for non-us citizens; observes two main loopholes , only information from us assets is shared and no beneficial ownership information is being shared; calls on the commission and the member states to enter into new negotiations with the united states in the oecd framework in order to achieve full reciprocity in a commonly agreed and strengthened crs framework; stresses that this would lead to significant progress and lead to lower compliance costs for fis and significantly reduced bureaucratic burdens; calls on the european commission and the member states to enter into negotiations for a un tax convention;


### 1. highlights that the statutory independence of the ecb is a prerequisite for it to fulfil its mandate; ### 1. highlights that the statutory independence of the ecb is a prerequisite for it to fulfil its mandate; emphasises that accountability is the necessary counterpart to that independence;


### 2. welcomes the ecb monetary policy strategy review adopted unanimously and announced on 8 july 2021 , which sets out how to achieve the primary objective of maintaining price stability and contribute to the achievement of the union’s objectives without prejudice to the objective of price stability; ### 2. welcomes the ecb monetary policy strategy review adopted unanimously and announced on 8 july 2021 , which sets out how to achieve the primary objective of maintaining price stability and contribute to the achievement of the union’s objectives without prejudice to the objective of price stability; notes that this is the first strategy review in 18 years;


### 3. is deeply concerned about the unprecedented healthcare , social and economic crisis caused by the covid-19 pandemic , resulting in a sharp contraction of the euro area economy , a sharp increase in economic and social inequalities , and rapidly deteriorating labour market conditions; notes that euro area activity is expected to rebound , although the speed , scale and evenness of the rebound remains highly uncertain; ### 3. is deeply concerned about the unprecedented healthcare , social and economic crisis caused by the covid-19 pandemic , resulting in a sharp contraction of the euro area economy , a sharp increase in economic and social inequalities , and rapidly deteriorating labour market conditions; notes that euro area economic activity is expected to rebound , although the speed , scale and evenness of the rebound remains highly uncertain;


### 4. stresses that sustainable growth , resilience and price stability cannot be achieved by monetary policy alone and that supportive and discretionary fiscal policy and socially balanced and productivity-enhancing reforms and investments are also necessary; acknowledges president lagarde’s call for full alignment of fiscal and monetary policies in tackling the covid-19 crisis; ### 4. stresses that sustainable growth , resilience and price stability cannot be achieved by monetary policy alone and that supportive and discretionary fiscal policy and socially balanced and productivity-enhancing reforms and investments are also necessary; supports president lagarde’s call for full alignment of fiscal and monetary policies in tackling the covid-19 crisis;


### 6. underlines the importance of a central fiscal capacity capable of providing a counter-cyclical stabilisation function and timely and adequate support in the event of economic shocks; ### 6. underlines the importance of a central fiscal capacity capable of providing a counter-cyclical stabilisation function and timely and adequate support in the event of economic shocks as well as financing of the green transition; emphasises that a permanent central eu common fiscal capacity would act as the ecb’s central fiscal counterpart;


### 8. welcomes the ecb’s substantially eased monetary policy stance in response to the covid-19 crisis , which includes the introduction of the pandemic emergency purchase programme (pepp) , the relaxation of the eligibility and collateral criteria and the offer of new longer-term refinancing operations; welcomes , moreover , the ecb’s decision to maintain instruments , such as forward guidance , asset purchases and longer-term refinancing operations , as an integral part of its toolkit; ### 8. welcomes the ecb’s substantially eased monetary policy stance in response to the covid-19 crisis , which includes the introduction of the pandemic emergency purchase programme (pepp) , the relaxation of the eligibility and collateral criteria and the offer of re-calibrated longer-term refinancing operations; welcomes , moreover , the ecb’s decision to maintain instruments , such as negative interest rates , forward guidance , asset purchases and longer-term refinancing operations , as an integral part of its toolkit;


### 9. welcomes the ecb’s decision to continue to conduct net asset purchases at a significantly higher pace under the pepp until at least the end of march 2022; ### 9. acknowledges the ecb’s decision to continue to conduct net asset purchases at a moderately lower pace under the pepp until at least the end of march 2022;


### 12. notes the ecb’s decision on a new symmetric inflation target of 2 % over the medium term and its commitment to maintain a persistently accommodative monetary policy stance in order to meet its inflation target; notes with concern that inflation rose to a decade-high 3 % in august 2021; calls on the ecb to evaluate and address this upward trend and its consequences more attentively; ### 12. welcomes the ecb’s decision on a new symmetric inflation target of 2 % over the medium term and its commitment to maintain a persistently accommodative monetary policy stance in order to meet its inflation target; notes with concern that inflation rose to a decade-high 3 % in august 2021; calls on the ecb to evaluate this upward trend and its consequences attentively;


### 13. notes the ecb’s decision to include the costs related to owner-occupied housing in the hicp to better represent the inflation rate that is relevant for households; ### 13. welcomes the ecb’s decision to develop a roadmap to include the costs related to owner-occupied housing in the hicp , but stresses the need to accelerate this process , in order to better represent the inflation rate that is relevant for households and design better informed monetary policy operations; takes the view that methodologies aimed at isolating the investment component from the consumption component should ensure that the actual impact of the significant increase of housing price on consumer expenses is adequately captured;


### 14. recalls that , as an eu institution , the ecb is bound by the paris agreement and that this should be reflected in its policies; ### 14. recalls that , as an eu institution , the ecb is bound by the eu commitments under the paris agreement and the objective to achieve climate neutrality in the eu by 2050 at the latest , and that this should be reflected in all of its policies , decisions and operations;


### 15. agrees with the ecb that tackling the climate emergency touches not only upon its secondary but also upon its primary mandate , given that climate change and its consequences pose a threat to price stability; ### 15. agrees with the ecb that tackling the climate emergency touches not only upon its secondary but also upon its primary mandate , given that climate change and its consequences pose a serious threat to price stability; emphasises that tackling the climate and biodiversity emergency requires an integrated approach in order to achieve a just transition;


### 16. welcomes the ecb’s new action plan and its detailed roadmap of climate change-related actions to further incorporate climate change considerations into its policy framework; ### 16. welcomes the ecb’s new action plan and its detailed roadmap of climate change-related actions to further incorporate climate change considerations into its policy framework and models; emphasises that this is an important step , but stresses that more ambitious and timely action is required to tackle climate change and the loss of biodiversity and put climate action at the core of its strategy , moving away from the market neutrality principle;


### 17. believes that the market neutrality principle falls short of the commitments under the paris agreement and the eu’s objective of achieving climate neutrality by 2050 at the latest; notes that the ecb has already deviated from market neutrality in several instances; ### 17. believes that the market neutrality principle falls short of the commitments under the paris agreement and the eu’s objective of achieving climate neutrality by 2050 at the latest; notes that the ecb has already deviated from market neutrality in several instances; calls on the ecb to adopt a benchmark that fully accounts for market failures and the need to align with eu environmental objectives;


### 19. welcomes the fact that the ecb is taking steps to incorporate climate-related risks into its collateral framework but warns against delays in its implementation; is concerned about the fact that the ecb continues to rely exclusively on private external credit rating agencies (cras) for risk assessment; ### 19. welcomes the fact that the ecb is taking steps to incorporate climate-related risks into its collateral framework but warns against delays in its implementation and recommends the ecb also aligns its collateral framework with the paris agreement and eu climate objectives; is concerned about the fact that the ecb continues to over-rely exclusively on private external credit rating agencies(cras) for risk assessment;


### 20. underlines the pivotal role of small and medium-sized enterprises (smes) in the eu economy , economic and social convergence and employment; stresses that smes have been severely hit by the economic crisis caused by the covid-19 pandemic , which has led to a serious deterioration in their economic turnover and their access to finance; calls on the ecb to step up its efforts on financing and access to credit for smes; ### 20. underlines the pivotal role of small and medium-sized enterprises (smes) as the backbone of the in the eu economy , economic and social convergence and employment; stresses that smes have been severely hit by the economic crisis caused by the covid-19 pandemic , which has led to a serious deterioration in their economic turnover , the challenge to succeed in the green transition and their access to finance; calls on the ecb to step up its efforts on financing and access to credit for smes;


### 21. is concerned about the risks caused by the serious delay in completing the third pillar of the banking union; welcomes the ecb’s long-standing support of the establishment of a fully fledged european deposit insurance scheme (edis); ### 21. is concerned about the risks caused by the serious delay in completing the third pillar of the banking union; welcomes the ecb’s long-standing support of the establishment of a fully fledged european deposit insurance scheme (edis); stresses that the upcoming review of the crisis management and deposit insurance framework (cmdi) should include a proposal in this regard and address the existing loopholes in the resolution framework , in order to ensure a consistent and efficient approach for all banks , regardless of their size or business model; considers that the further integration of the banking sector could revitalize the "too big to fail" problem; calls on the ecb to refrain from promoting the further consolidation of the banking sector;


### 22. welcomes the ecb’s decision to launch a 24-month investigation phase of a digital euro project; calls on the ecb to effectively address the expectations and concerns raised during the public consultation on a digital euro; ### 22. welcomes the ecb’s decision to launch a 24-month investigation phase of a digital euro project; calls on the ecb to effectively address the expectations and concerns raised during the public consultation on a digital euro; points out that a digital euro shall not replace cash , should promote financial inclusion , and must give additional data privacy and legal security for consumers and companies; reiterates its strong concerns about the risks for financial stability , monetary policy and consumer protection posed by private stablecoins with potential for mass adoption , aimed to replace public currencies; invites the ecb to closely align and exchange with the parliament during the investigation phase;


### 24. calls on the ecb to step up its monitoring of the development of crypto-currencies and the related risks in terms of cybersecurity and money laundering; ### 24. calls on the ecb to step up its monitoring of the development of crypto-currencies and the related risks in terms of financial stability , monetary policy and the functioning and safety of market infrastructures and payments; stresses that the development of crypto-assets poses additional concerns in terms of cybersecurity and money laundering;


### 26. stresses the need to further enhance the accountability and transparency arrangements of the ecb; recognises the steps taken by the ecb; repeats its call to launch negotiations on a formal interinstitutional agreement; ### 26. stresses the need to further enhance the accountability and transparency arrangements of the ecb; notes in this context the existing staff rules of the ecb for potential conflicts of interests of staff and encourages the broad application of staff rules; recognises the steps taken by the ecb; repeats its call to launch negotiations on a formal interinstitutional agreement as it was already agreed for the banking supervision in order to strengthen accountability practices and the cooperation and exchange of information with the european parliament , while increasing its democratic legitimacy of the ecb , without prejudice to its independence; calls on the ecb to increase transparency towards the european parliament and civil society by publishing detailed minutes and reports in all eu languages and the ‘ecb listens’ initiative;