On September 14, 2022 the President of the European Union, Mrs. Ursula von der Leyen, delivered her third State of the Union Address to the European Parliament. This State of the Union’s main themes were the  Russian-Ukrainian war, the rebuilding of Ukraine and the impact the war has had on the European economy and energy markets and prices. Below we will provide some remarks Mrs. von der Leyen made in her State of the Union, that might be of special interest to tax specialists.


This is not only a war unleashed by Russia against Ukraine. This is a war on our energy, a war on our economy, a war on our values and a war on our future. This is about autocracy against democracy.

Millions of Europeans need support. EU Member States have already invested billions of euros to assist vulnerable households. But we know this will not be enough. This is why we are proposing a cap on the revenues of companies that produce electricity at a low cost. These companies are making revenues they never accounted for, they never even dreamt of. In our social market economy, profits are good. But in these times it is wrong to receive extraordinary record profits benefitting from war and on the back of consumers. In these times, profits must be shared and channelled to those who need it the most.

Our proposal will raise more than 140 billion euros for Member States to cushion the blow directly.


At this moment no details are available on how the European Commission intends to implement the abovementioned.


And because we are in a fossil fuel crisis, the fossil fuel industry has a special duty, too. Major oil, gas and coal companies are also making huge profits. So they have to pay a fair share – they have to give a crisis contribution. These are all emergency and temporary measures we are working on, including our discussions on price caps.

Again at this moment no details are available on how the European Commission intends to implement this crisis contribution are available.

Because the strength of our social market economy will drive the green and digital transition. We need an enabling business environment, a workforce with the right skills and access to raw materials our industry needs. Our future competitiveness depends on it. We must remove the obstacles that still hold our small companies back. They must be at the centre of this transformation – because they are the backbone of Europe's long history of industrial prowess. And they have always put their employees first – even and especially in times of crisis. But inflation and uncertainty are weighing especially hard on them.

This is why we will put forward an SME Relief Package. It will include a proposal for a single set of tax rules for doing business in Europe – we call it BEFIT. This will make it easier to do business in our Union. Less red tape means better access to the dynamism of a continental market.

And we will revise the Late Payment Directive – because it is simply not fair that 1 in 4 bankruptcies are due to invoices not being paid on time.


Already in May 2021 the European Commission announced its intention to present the “Business in Europe: Framework for Income Taxation” (or BEFIT) in 2023. BEFIT will provide a single corporate tax rulebook for the EU, providing for fairer allocation of taxing rights between Member States. An intention that Mrs. von der Leyen now seems to have reaffirmed.


The full text of the State of the Union can be found here on the website of the European Commission.


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