Business taxation for the 21st century

In May 2021, the European Commission published the Communication on Business Taxation for the 21st Century, setting out the Commission’s long-term vision to provide a fair and sustainable business environment and EU tax system. Policy initiatives aimed at promoting sustainability through tax measures tend to be focused on large companies, either as power suppliers (decarbonising the energy sector) or the most significant power users (supporting industry to innovate).

Leaseurope has pointed out that on its own, this approach risks missing the opportunity to help the 99% of European businesses that are SMEs to contribute to a more sustainable European economy through their investment in new equipment and vehicles. Leasing and rental services are used by over 40% of all SMEs, that is over 8 million European businesses. Leaseurope’s research has also shown that SMEs using leasing and rental invest more than twice as much as other SMEs, in other words most businesses with substantial investment needs are likely to lease or rent new vehicles and equipment. If the tax policy goal is to support investment and sustainability, making this work for SMEs and the leasing and rental firms enabling their investment is essential.