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Brussels wants € 12bn a year from the EU carbon trading scheme

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Brussels wants to take part in the EU’s € 12bn annual emissions trading scheme (ETS) and use it to repay repayment loans and support vulnerable families, as the European Commission develops new funding mechanisms from member states.

Suggestions from the council also provide one of the new features a way to change the limits of carbon which will provide the worst tax revenue abroad, earning more than € 1bn per year in revenue. And Brussels has adopted a growing number of international tax reforms, which are being sought recent OECD agreement, reaching € 4bn of additional funding.

The new EU “package” of new assets, amounting to € 17bn a year from 2026 onwards, could change the agency’s revenue, but it has to face difficult negotiations with member states that could frustrate giving Brussels new funding options. Brussels says the extra money is needed to repay the outstanding debt that will be collected. € 800bn plague recovery program.

Member states ratified last year with the commission and parliament to work on innovation his treasure, but the sources of the money will be controversial. The ETS is under attack from other countries who oppose the rise in carbon prices – which has reached a record high above € 90 tonnes of CO2 this month – running home electricity bills.

The commission said the value of the record had brought another € 11bn profit to EU governments in 2021 from a year earlier. ETS funds currently belong to member states.

ETS is a central pillar in the EU’s greenhouse gas emissions strategy, which aims to hit zero emissions by 2050. Brussels seeks to expand its policy by creating a small market for home and car air – a measure that has met with fierce opposition. from France and Spain and the poorest countries facing rising prices from power changes such as Poland, Hungary and the Czech Republic.

Its ambitions are to squander all ETS revenue and contribute to the EU budget to finance repayment by 2058. Brussels also wants to use ETS funds to create a Social Climate Fund to compensate the poorest families for the high cost of living. of electricity.

Brussels estimates the size of the fund will be around € 24bn split at 2025-27, but the measure has caught fire from northern states seeking to waive their planned investment, with southern governments arguing that compensation should be larger.

Johannes Hahn, EU Commissioner for Budget, said he was confident that the member states would live up to their aspirations. However, he said the high cost of the Social Climate Fund means that the second phase of the proposal will be needed in 2023 to get some new items, in order to make all the money needed to repay the debt of NextGenerationEU.

The ideas on the table may include sales tax – something the EU has struggled to find political support since the idea was first established in 2011.

Today’s package from the committee also provides Brussels’ plans to recoup 15 percent of EU revenue under the OECD agreement on international tax, which took place between 137 countries in October. The treaty requires that most countries pay higher taxes on their business dealings, and the agency estimates it will generate EU budget of between € 2.5bn and € 4bn a year.

Brussels is also launching a special law Wednesday that will establish another pillar of the recent OECD international agreement that brings the smallest corporate taxation worldwide.

This will create a 15 percent lower corporate income tax rate in the EU. The law strictly follows the model rules released Monday by the OECD regarding how countries are required to comply with the minimum tax. But, with the departure of the OECD, the EU plans to increase taxes on domestic companies with more than € 750m a year, not in various countries. This has been done to ensure that the new tax does not discriminate against foreign and foreign companies in a way that could infringe on the fundamental rights of the bloc.

The development makes the EU the first region to implement the international tax agreement but, in order for the treaty to take effect by 2023 as planned, all 137 signatories must establish rules and ratify the treaty by that date.

The plan to create a lower tax comes along with the ban on the use of bulletproof companies to evade taxes within the EU. This is part of a larger strategy to ensure that businesses take a fair share of government spending. The Commission’s policy seeks to make it more difficult for businesses to set up institutions that do less financially but are used to reduce taxes.

Optimization is part of a global effort to reduce the risk of corporate exploitation and tax evasion opportunities around the world, to shift profits to low-income taxpayers and to prevent the finance ministry from accessing finance.

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