Brussels – Slovak MEP Ľudovít Ódor (RE/PS) was elected as the rapporteur of the European Parliament (EP) for the so-called 28th EU legal regime for tax issues in Brussels at the end of last week. In a Thursday interview with TASR, he reminded that this is a pan-European framework for innovative and start-up companies, which aims to unify the rules so that companies can operate more easily in the EU single market.
According to his statement, the goal of the regime, additional to the regimes of the 27 member states, is simple: to ensure fair and predictable taxes that will not tie companies’ hands when operating in other member states; a clear connection to existing national legal systems and the introduction of minimal administrative burden.
Ódor, as the rapporteur, should focus on tax issues, namely what the impact will be on tax obligations, the method of taxing income, and preventing double taxation, as well as ensuring appropriate reporting to avoid unnecessary burdens on businesses.
The EU does not have a functioning single market for start-ups and innovative companies
“We still do not have a functioning single market in many areas in the EU. This is primarily about innovative companies. Someone has a good idea in Slovakia, it takes off there, but if they want to expand to other countries in the Union, they cannot. Start-ups do not have the resources to understand all the legislative environments, how the tax regime works there, and then they have to pay hefty sums just to scale their products,” described the situation Ľudovít Ódor.
He pointed out that sometimes it is so difficult for new and innovative businesses that they prefer to expand their operations to America instead of staying in Europe. According to him, this can be prevented in two ways: through gradual harmonization of all areas concerning innovative companies, which is a long road, or by using a “shortcut,” namely the 28th regime.
“It is actually about creating one fictitious regime, into which when innovative companies enter, they can then operate throughout the EU. This gives them the opportunity to reach over 400 million people at once; they do not have to jump from one state to another like on a chessboard. They can have a relatively large market at once, which is now an advantage for both China and the United States. They have huge markets, while we pretend to have a single market, but that is not the case even in new areas,” explained Ódor.
The MEP reminded that the need for the 28th regime is also mentioned in the report by Mario Draghi on the competitiveness of the EU. He initiated the need to address this regime in the EP Subcommittee on Tax Issues (FISC), and thus the European Parliament will also have to take a position on it. Next year, the European Commission and the European Parliament will come up with a proposal for the 28th regime, and if the euro-institutions agree through trilogues, there will be a possibility to introduce this regime and thus meet the needs of innovative European companies. (November 6)
