The resolution introduces a unified framework for corporate taxation across the EU, aiming to simplify compliance and reduce double taxation for cross-border businesses. 

RF Report

The European Parliament has approved Legislative Resolution No. P10_TA(2025)0268 on the Business in Europe Framework for Income Taxation (BEFIT) on 13 November 2025.

The resolution introduces a unified framework for corporate taxation across the EU, aiming to simplify compliance and reduce double taxation for cross-border businesses. The new, simpler BEFIT rules could reduce business current tax compliance costs by up to 65%.

The Resolution confirms that the European Parliament approved the Commission proposal as amended, despite receiving reasoned opinions from the Swedish, Maltese, and Irish Parliaments that challenged the subsidiarity principle. The resolution further outlines the procedural calls made to the Council and the Commission regarding the progression and potential modification of the BEFIT proposal.

The main measures include:

  1. Standardised corporate tax rules for calculating tax bases.
  2. Expanded permanent establishment (PE) concept, covering significant economic presence, including digital operations.
  3. Anti-BEPS measures, such as controlled foreign company (CFC) rules and limits on royalty payments, aligned with OECD/G20 standards.
  4. Harmonised deductions and targeted incentives, while restricting harmful tax practices.
  5. Additional compliance and reporting requirements to ensure transparency.

On 12 September 2023, the European Commission adopted the Business in Europe: Framework for Taxation (BEFIT) proposal.

BEFIT is a proposal for a new legislative framework for corporate taxation in the EU. It introduces common rules for computing the taxable results of group members which operate in the internal market.

The BEFIT proposal builds on the OECD/G20 international tax agreement on a global minimum level of taxation, and the EU Directive on minimum effective taxation (Pillar 2).

Currently, large cross-border groups must comply with up to 27 different national tax systems in the EU, making it difficult and costly for them to do business across the internal market.

This complexity creates an uneven playing field and increases tax uncertainty and tax compliance costs for businesses operating in more than one Member State. It also discourages cross-border investments, putting EU businesses at a competitive disadvantage compared to businesses operating in markets of a comparable size elsewhere in the world.

BEFIT entered into force on 31 December 2023.

Who is in scope?

The new rules will be mandatory for groups operating in the EU with an annual combined revenue of at least EUR 750 million. For groups headquartered in third countries, their EU group members would need to have at least EUR 50 million of annual combined revenues in at least two of the last four fiscal years, or at least 5% of the total revenues of the group. This ensures that the requirements of the proposal are proportionate to its benefits.

Smaller groups may choose to opt in as long as they prepare consolidated financial statements. This option could be of particular interest to SME groups that operate cross-border, as they may have fewer resources to dedicate to compliance with multiple national corporate tax systems.