FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, February 19, 2020. Picture taken February 19, 2020 REUTERS/Yves Herman
BRUSSELS (Reuters) – A new corporate tax could raise 10 billion euros a year to help fund stimulus plans while amounting to less than 0.2% of turnover of large companies that benefit from the European Union’s single market, the bloc’s executive said on Monday.
Under a plan awaiting approval or changes from the 27 EU member states, the European Commission would borrow an unprecedented 750 billion euros in the market to fund spending aimed at reviving economies ravaged by the coronavirus crisis.
It has proposed several possible levies to help repay the debt, including the new single market tax, which would come into force in or after 2024.
“Depending on the design, whether a lump sum or a fee proportional to firms’ size, or a portion of a tax on profits, around 10 billion euros could be raised without excessively weighing on any individual firm,” a Commission spokeswoman said.
“Ten billion euros is less than 0.2% of the turnover generated by the EU operations of those large companies.”
The spokeswoman added that the expected annual revenue was a preliminary estimate falling in the middle of various options under consideration for the tax.
The Commission has also floated other possible sources of new revenue for the EU’s joint budget — from a plastics tax to a levy on carbon footprint of imports — to repay stimulus debt.
The EU’s top budget official, Johannes Hahn, told the Financial Times in an interview published on Sunday that the single market tax could affect 70,000 companies in Europe with global turnover exceeding 750 million euros.
Reporting by Gabriela Baczynska; Editing by Catherine Evans