On 24 January, Insurance Europe shared its views on the European Commission’s proposal for a 'Business in Europe: Framework for Income Taxation (BEFIT)'. While the insurance industry supports the goal of harmonising corporate tax rules across the EU, it raises serious reservations about the current draft EU Directive.
The industry is concerned about the interplay between the proposed European framework and existing legislation, notably the EU's Minimum Corporate Taxation Directive and the Country-by-Country Reporting (CbCR) Directive.
The industry also notes that the relation between BEFIT and the already implemented International Financial Reporting Standard (IFRS) 17 and 9 is not clear and must be addressed before the draft Directive is adopted.
Furthermore, the insurance industry is concerned about the level of flexibility for Member States in applying additional post-allocation adjustments in areas not addressed by the common framework. Insurance Europe calls for a limit to possible national adjustments, to achieve the goal of a streamlined, European, corporate taxation framework. The proposal should also effectively consider aspects specific to the insurance industry, such as the tax treatment of technical reserves.
Therefore, to achieve a clear and coherent legislative framework, and to avoid undue burden on companies, the insurance industry urges EU legislators to postpone negotiations on BEFIT until any legislative overlap is clear and addressed.