Strasbourg, 6 October 2026
MEPs on Tuesday adopted recommendations on how the EU should approach corporate tax policy in light of the situation at the global level.
The report, drafted by Kinga Kollár (EPP, HU), focusses on the recent agreement on a ‘Side-by-Side system’ (SbS), which aims to ensure a co-existence of the OECD’s global minimum effective tax rate (Pillar II) and the US’ Net CFC Tested Income (NCTI) tax rule. It also looks at ongoing efforts to address fragmentation and simplification of corporate tax rules, the international negotiations on digital taxation, and the negotiations on the UN Framework Convention on International Tax Cooperation.
Global Minimum Tax rate and the Side-by-Side System
The report regrets that the global implementation of the OECD Pillar II remains incomplete with major economies such as China and India not having implemented it. It also notes that the coexistence of Pillar II with other concurrent domestic minimum tax regimes, as foreseen by the SbS agreement with the US, weakens the reform and creates more fragmentation. For this reason, the report asks the OECD to analyse the potentially negative impact of the SbS system on Pillar II and asks the Commission to analyse and publish the impact assessment of the SbS, including potential revenue losses incurred by Member States.
Competitiveness and the EU’s simplification agenda
The Commission is asked to explore further simplification opportunities within the OECD, for example by streamlining overlapping reporting requirements or by introducing safe harbours. The report also calls on Member States to advance speedily on the EU’s tax simplification agenda which is already in the works, while ensuring that this exercise doesn’t weaken transparency or anti-tax avoidance rules. The report calls on the Commission to re-examine its BEFIT proposal on a common corporate tax base to tackle potential inconsistencies with the new Pillar II rules and to consider presenting a new, narrower proposal with a step-by-step approach.
Digital Taxation
The report takes note of the developments on digital taxation and points out that a rethink of the allocation of taxing rights may be necessary in view of recent shifts. It underlines the importance of measures adopted by broad international participation and implementation, while maintaining that unilateral measures, including digital services taxes, remain a legitimate instrument for Member States to protect and preserve their tax bases, especially if there is insufficient progress at global level.
UN Framework Convention on International Tax Cooperation
The report calls on Member States to continue to engage constructively in the UN process while underlining that any UN-led process should complement the existing OECD/G20 process.
Quote of the rapporteur
Ms Kollár said:
The Parliament’s report comes at a time when the geopolitical, technological, and economic landscape is evolving at an unprecedented speed, and tax policy must respond accordingly. The global minimum tax was a welcome step towards ensuring a level playing field, but greater consistency in implementation is essential. At the same time, we in Europe should make sure that our tax systems stay competitive, especially for high value-added industries. We should also avoid duplicative and disproportionate tax compliance burdens, and it is welcome to see that the Commission’s Tax Omnibus proposal points also to these directions.”
Vote result
The report was adopted in plenary with 364 votes in favour, 69 against and 162 abstentions.
Further information
- The adopted text will be available here (click on 06.10.2026)
- File of the procedure – The EU’s approach to corporate tax policy in a changing international environment
Source – EU Parliament