Background

The Commission's proposal for the 28th regime would allow any company registered in a Member State to register as an 'EU Inc.', in a quick and fully digital manner, with legal effect across the EU. The Letta report stresses that creating an EU-level business legal form, known as the 28th regime, would constitute a game changer for the completion of the single market. The EU Inc. proposal is part of the Commission's commitment in the Competitiveness Compass to help close the innovation gap, and constitutes a key contribution to a more integrated single market under the One Europe, One Market roadmap.

The tax provisions of the proposal are limited to a single tax treatment of employee remuneration through stock options and participation schemes. In Parliament, the proposal has been referred to the Committee on Legal Affairs (JURI); the rapporteur is René Repasi (S&D, Germany). In its January 2026 resolution on the 28th regime, Parliament called for the new framework to address tax-related issues.

Parliament's own-initiative report

On 3 June 2026, the Committee on Economic and Monetary Affairs (ECON) adopted an own-initiative report on the feasibility of a 28th tax regime and its potential to support EU competitiveness, complementing the tax provisions included in the Commission proposal, by 36 votes to 18, with 1 abstention. The report provides concrete tax recommendations aimed at simplification and harmonisation, consistent with the objectives of the 28th regime, while respecting Member States' competence. Its key recommendation is the introduction of a legally secure tax module that EU Inc. companies could opt to include in their tax filings, and that would be automatically recognised by and accessible to other Member States. The module would be part of the one-stop shop or on a dedicated platform, fully digital and standardised in English.

The module could simplify and harmonise corporate income taxation, for example through an EU consolidated tax base, standardisation of tax returns, improved communication among tax authorities and the 'digital first' principle. As regards value added tax (VAT), EU Inc. companies would also have access to a centralised VAT framework, with a single EU VAT number and the digital one-stop shop portal for declarations and refunds. Withholding tax procedures would be streamlined and simplified thanks to the recognition of a tax residence, centralised in an EU-wide registry accessible to Member States.

As regards EU employee stock options (EU-ESO), which are optional in the EU Inc. proposal, the report recommends that they become mandatory under the tax module and be treated as capital income instead of as employment income. The report suggests establishing a single digitally verified status of investors to prevent double taxation of capital gains. Finally, the tax module would introduce coordinated and strictly conditioned tax incentives for research and development.

Own-initiative report: 2025/2211(INI); Committee responsible: ECON; Rapporteur: Ľudovít Ódor (Renew, Slovakia). For further information see our briefing entitled The 28th regime corporate legal framework.