Safeguarding Europe’s competitiveness: Strategic tax measures for a disruptive global landscape

Key messages

• Europe must not bear the global tax burden alone.
  Global acceptance and consistent implementation of the G7 Statement is an immediate priority to prevent Europe from locking in a long-term competitiveness disadvantage under the OECD/G20 Pillar Two rules. As negotiations advance, the EU should remain ready to reassess its Pillar Two framework to ensure it remains a reasonable and proportionate way forward for European businesses.
• Decisive action is needed to safeguard the competitiveness of European businesses.
  European businesses need concrete relief to offset the disadvantages of strict and early Pillar Two implementation, and to ease the heavy, complex tax framework weighing on them. This requires action across three complementary strands:
  Extension and Development of Pillar Two Safe Harbours.
  To restore a degree of workability and predictability under Pillar Two, the current transitional safe harbour based on Country-by-Country Reporting data requires extension until a permanent version is agreed. A permanent safe harbour should be developed with structured business input, applied retroactively, and aligned with the G7 Statement to ensure material simplifications and consistent global implementation.
  Simplification that Delivers Genuine Relief.
  Europe’s tax framework is overly complex and fragmented. The EU must move from political pledges to tangible action, eliminating duplicative reporting, ensuring consistent implementation across Member States, and providing measurable, lasting compliance relief for businesses.
  A Pro-Investment Tax Framework to Safeguard Competitiveness.
  Europe must actively support investment to strengthen capital attractiveness, boost innovation, and foster sustainable growth through investment-friendly tax measures.