EU proposes tax on companies with turnover above 100 million euros to shore up budget

By Foo Yun Chee

BRUSSELS (Reuters) -The European Commission on Wednesday proposed to tax companies with a net turnover exceeding 100 million euros ($116 million), one of five new revenue streams aimed at generating 58.5 billion euros annually for the European Union's next seven-year budget.

The 2-trillion euro EU budget, which will run from 2028 to 2034, must be agreed by all 27 member countries and signed-off by the European Parliament.

Intense negotiations over Wednesday's proposals will pit rich net budget contributors against poorer net beneficiaries and traditional sectors like agriculture against the need to develop cutting-edge new technologies.

The seven-year budget will have to take into account 338 billion euros of grants to be disbursed to EU governments by the bloc's pandemic recovery fund and should be paid back in full by 2058, as well as outlays for the green transition, projects to boost the bloc's competitiveness and higher defence spending.

The current 2021-2027 budget amounts to 1.2 trillion euros.

The following are the new revenue streams proposed by the EU's executive Commission:

* An annual lump-sum corporate levy on EU companies and non-EU companies doing business in the European Union and making at least 100 million euros in net annual turnover. Expected to raise about 6.8 billion euros annually.

Governmental entities, international organisations and non-profit organisations would be excluded.

* A levy on non-recycled plastic packaging waste calculated by the kilo, adjusted annually for inflation and expected to generate 15 billion euros yearly.

* A tobacco excise duty estimated to raise 11.2 billion euros annually.

* Allocating to the EU budget some of the revenue from the sale of carbon permits in the EU Emissions Trading System (ETS), which currently goes to EU countries. This is expected to generate 9.6 billion euros yearly.

* Allocating part of the revenue from the upcoming EU carbon border tariff on polluting imported goods to the EU budget. This is expected to generate 1.4 billion euros yearly.

($1 = 0.8612 euros)

(Reporting by Foo Yun Chee, additional reporting by Kate Abnett; Editing by Catherine Evans)