On September 12 the European Commission adopted the directive proposal Business in Europe: Framework for Income Taxation ("BEFIT"). BEFIT aims to “introduce a common set of rules for EU companies to calculate their taxable base while ensuring a more effective allocation of profits between EU countries, based on a formula.”
The directive proposal on BEFIT replaces — and thus repeals — the commission’s proposal for a common corporate tax base and the proposal for a common consolidated corporate tax base that have never reached consensus. However, BEFIT strongly resembles the previous CCCTB proposal.
The BEFIT proposal establishes a common set of rules to determine the tax base of companies subject to corporate income tax in an EU member state as part of a group that prepares consolidated financial statements. Moreover, BEFIT would require the aggregated tax base of the members of the BEFIT group members to be allocated based on formulary apportionment. If adopted by the EU Council, the BEFIT proposal would enter into force on July 1, 2028.