The EU Commission announced on May 27th, 2020 a set of new budget and policy programs focused in both post Covid-19 recovery and resiliency for the whole EU denominated the “Next Generation EU” (NGEU).
It follows an executive analysis of the key points of this “Major Recovery Plan” and how Tax fits into the big picture plan:
INVESTING FOR THE NEXT GENERATION
Overarching plan it to repair and revitalize the Single Market, to guarantee a level playing field, and support the urgent investments in the green and digital transitions.
Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2.00% and borrowing €750 billion on the financial markets to be channeled through EU programs in investments focused on those key areas.
Policy fundamentals of the recovery
- EU Green Deal, central to recovery strategy: Renovation of infrastructures, move to circular economy, rolling out renewable energy, cleaner transport and logistics, (installing 1M charging points for electric vehicles);
- Adapting EU single market to the digital age: 5G networks, stronger industrial and technological presence in artificial intelligence, cybersecurity, supercomputing and cloud;
A.I. white paper / Digital Services Act / Proposal on Crypto-assets / Labor condition for Platform workers.
- Building a real data economy as a motor for innovation and job creation;
- Support re-skilling, to create new economic opportunities. Digital education action plan.
- Fair minimum wages
- 21ST Century Business Taxation / Stepping up the fight against tax evasion / Customs single Window proposal
Policy fundamentals of building a more resilient EU
- Enhance EU’s autonomy in a number of specific areas:
- Strategic value chains
- Reinforced screening of foreign direct investment.
- Strategic value chains
The NGEU plan objectives are clear:
Green & Digital transitions including policies for data driven economy, and much more strategic focus on how EU will share and protect its interests in the Geo-Politics new landscape.
Also are the high level budgets and funding plans needed to nurture the expected actions behind.
As part of the 6 main “Headline Ambitions”, tax is inside the 3rd one: “An economy that works for people”, where it mention that the international tax framework needs to keep pace with technological change and globalization and it will be done through 2 initiatives:
- Business Taxation for the 21st century
- Action plan to fight Tax Evasion.
The fact-sheet covering in brief how EU will fund part of the plan is also indicating that several new “own resources” are to be considered; Some of them might look like taxes or equivalent figures of a particular new nature.
Please see our specific DET3 news for more information on the NGEU Tax part.