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European Capital Markets Institute

ECMI conducts in-depth research aimed at informing the debate and policy-making process on a broad range of issues relevant to capital markets.

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Through its various activities, ECMI facilitates the interaction among market participants, policymakers and academics.

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Our membership base and governance model are the best guarantee of ECMI’s independence as a research institute.

 

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EU corporate taxation in the digital era

The current international system that coordinates corporate income tax is increasingly unable to deal with a highly integrated and digitalised economy. To avoid taxes, multinational enterprises (MNEs) exploit the system’s inadequacies by shifting profits to low or non-tax jurisdictions – about 40 % of EU MNEs’ profits have been shifted to low-tax jurisdictions.

In July 2021, to ensure that profits are taxed where economic activities take place, the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) agreed on an historic two-pillar solution. Following this, in December 2021 the European Commission proposed a directive to implement Pillar Two in the EU. In December 2022, after several attempts to harmonise taxes, Member States finally and unanimously agreed to adopt the Directive, ensuring a global minimum level of taxation of 15 % for MNEs.

A new study ‘EU corporate taxation in the digital era’, highlights the main developments in corporate taxation over the last few decades in both the EU and the US. It analyses MNEs’ activity and profit shifting, and the impact of a 15 % minimum corporate tax. It also discusses the critical points in Pillar Two’s design that have raised concerns and require careful calibration. Finally, it proposes recommendations on how to improve Pillar Two’s functioning and how to implement the Business in Europe: Framework for Income Taxation BEFIT, stressing the importance of simplicity and uniformity.

Launched in February 2022, a CEPS-ECMI Task Force brought together a working group of industry experts, corporates, academia and EU/international institutions for research and discussion over a period of 18 months.

“Pillar Two is a great step forward in international tax co-operation. The related EU directive strengthens the process and pushes to further integration in Europe. BEFIT is a great opportunity to remove obstacles that impact the functioning and competitiveness of the internal market. Simplicity, uniformity and the reduction of compliance costs will be the keys to its success.”, Vieri Ceriani, Chair of the Task Force, and Former Under-Secretary of State, Italian Ministry of Finance and Economy (Monti Government)

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Recent Publications

EU Corporate taxation in the digital era - The road to a new international order

Published in: 
Books
18.09.2023

The current international system that coordinates corporate income tax is increasingly unable to deal with a highly integrated and digitalised economy.

Bank stress tests only lift a tip of the veil

Published in: 
Commentaries
29.08.2023

The latest results of the EU-wide stress test exercise conducted by the European Banking Authority (EBA) and the European Central Bank (ECB) provide a reassuring picture of the h

The EU's new crypto and cyber rules

Published in: 
Policy Briefs
18.07.2023

Crypto currency matters are seemingly in the news every day, but the EU’s new tailor-made regulatory regime is not.

Harnessing high-quality data for climate resilience

Published in: 
Event Reports
26.06.2023

When discussing climate resilience, accessibility to – and quality of – data is crucial. Equally important is how different stakeholders (e.g.

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Recent Events

The Road to 2030: Setting Priorities Now for Europe’s Capital Markets

Published in 
Annual Conferences
07.11.2023
09:45-16:00
Venue: 
CEPS - Centre for European Policy Studies 1 Place du Congrès / Congresplein 1000 Brussels

This year's ECMI Annual Conference will focus on setting priorities for Europe's capital markets up to 2030 and on ideas for the new European Parliament and the European Commission that will begin their mandates in 2024. In addition, we will exchange views on the sustainability rating providers and the regulatory framework around them, as well as the consolidated tape and the market for market data.

Making the OECD’s corporate tax agenda work for the EU - Launch of Task Force Report

Published in 
Task Forces
18.09.2023
15:00-16:30
Venue: 
CEPS - Centre for European Policy Studies 1 Place du Congrès / Congresplein 1000 Brussels

A historic process is under way in the EU with the unanimous agreement to implement the Minimum Tax Directive (Pillar Two), and a forthcoming proposal for the apportionment of corporate tax income

2023 ECMI Call for papers

Published in 
Annual Conferences
10.09.2023
23:00
Venue: 
CEPS - Centre for European Policy Studies 1 Place du Congrès / Congresplein 1000 Brussels

The European Capital Markets Institute (ECMI) is calling for the submission of research papers in the area of capital markets and their functioning.

The EU’s bank regulatory woes – where do we go from here?

Published in 
Lunchtime events
28.06.2023
13:00-14:30
Venue: 
CEPS - Centre for European Policy Studies 1 Place du Congrès / Congresplein 1000 Brussels

The fissures in banking markets have renewed interest in the regulatory approaches over the last few months.

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European Capital Markets Institute

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Tel: +32 (0) 2 229 39 87

Email: ecmi@ceps.eu

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  • About ECMI
    • Mission & Governance
    • Membership
    • Research Team
    • Activities Report
    • Join us
    • Contact us
  • Publications
    • Commentaries
    • Policy briefs
    • Research reports
    • Working papers
    • Event Reports
    • Books
  • Task Forces
  • Events
    • Forthcoming events
    • Past events
  • Statistics
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