Changes from C2 to C2

5. Corporations - Operate inside the member-states, defined as entities engaging in any type of economic activity within the territory of the member-states, including but not limited to manufacturing, sales, service provision, or any form of commercial operations, shall comply with all relevant regulations and laws of the European Federation. This definition excludes entities whose sole interaction with the member-states consists of importing goods or services from the European Federation without engaging in any other economic activity within its territory, but they might be subject to different tariffs

1. The Minimum Corporate Tax Rate shall be set by an evaluation by the Ministry of Finance. The evaluation will take into account the Balance Sheet Total (BST) of each corporation. The Miminum Corporate Tax Rate shall be set:

1. • For companies with a BST ≤ 10.000.000 will be taxed at a rate of 5%.

1. • For companies with a BST ≥ 42.000.000 will be taxed at a rate of 15%.

1. • For companies that hang in the middle range will be taxed progressively at the rate set by the tax determination law.

3. Corporate entities that demonstrate significant contributions to environmental sustainability, such as reducing carbon emissions by at least 20% or transitioning to renewable energy sources for at least 50% of their operations, shall receive additional tax incentives. These incentives may include a further reduction in the corporate tax rate by up to 2%.

1. establishes a Carbon Domestic Adjustment Mechanism applicable to all member states of the Federation, consisting of a hybrid system based on both the ‘cap and trade’ structure (ie. permits) and a taxation regime.

The initial tax rate shall be set at €30 per metric ton of carbon dioxide equivalent emissions.

The tax rate shall be subject to an annual increase of 5% plus the rate of inflation, to ensure the continued effectiveness of the Carbon Domestic Adjustment Mechanism in reducing emissions.

The system shall be structurally based on the ‘cap and trade’ principle (ie. permits), and will incorporate a 10% tax which shall be applied to the market price of carbon credits. The latter tax is to be borne on the firm purchasing carbon credits.
Global emission targets (and thus permits issued), will be decreased at a rate of 5% per year.

Revenues generated from the Carbon Domestic Adjustment MechanismEuropean Union emission Trading systeme (ETS) shall be allocated to the Federal Budget and used for the following purposes:

2. Support for innovation in low-carbon technologies as determined by the independent commission.

3. Assistance to industries and communities transitioning away from fossil fuels with the decision of the independant commission.

Article 4c.

Article 4c.

Article 4d.

The national authority that will decide the allocation of the revenues of the ETS will be an independent commission:

• This commission will be composed by an equal number of experts, the Minister of finance and the ministers of environments from each member-state.

• Each member states will propose a list of experts, and the European House of citizens will decide witch ones will be a part of the commission.

• This commission can propose an exception to the ETS that must be approved by the parliament.

The Uniform VAT Rate shall be set at:

• 2% for essential goods and services, this VAT rate shall not be raised any higher by Member States;

• 5% of the common goods and services;

• 10% for luxury goods and services.

The Uniform VAT Rate shall be set at 20% of the commodity’s Value added, a quarter of which is due to the Federation’s budget.

Each commodity’s value added shall go to the European Federation budget, while Member States retain the ability to fix at their discretion a higher national VAT rate.

4. events that pose a direct threat to national or Federal security.

4. security;

5. economic and financial crisis, putting the welfare of the citizens of the Federation at risk.

6. energy crises.

The issuance of debt shall be granted solely to the Federal Treasury Agency, under the approval by an absolute majority of the House of European Citizens and the Senate.

From 1 January 2032, Member-States shall cease to generate debt on their own initiative and capacity.

Member-States shall be able to generate debt but must meet the Maastricht criteria by 2040 (60% of debt to GDP ratio and 3% of deficit).

extraordinary legislative procedure, present measures to increase the aforementioned taxes or create new ressources destined to the Federal Budget.

Ensuring Transparency and Accountability in Tax Payments, Member States shall ensure full transparency and accountability in the payment of all taxes and levies, including those owed to international organizations and funds.

Each Member State shall establish a publicly accessible registry detailing all tax payments made to international bodies, including the specific amounts, dates, and purposes of such payments. This registry shall be updated quarterly and made available online in an open data format.

Failure by a Member State to comply with transparency and accountability requirements for tax payments shall result in the following penalties:

1. The Member State shall be brought before the Court of Justice of the European Federation. The Court may impose periodic penalty payments or lump sum fines until compliance is achieved.

2. If the Member State still fails to comply after Court penalties, the Commission may seek further enforcement measures under Articles 258-260 TFUE.

Whistleblowers and civil society organizations that report suspected tax payment irregularities shall be protected from retaliation and their claims thoroughly investigated. A reward system shall be established to incentivize the reporting of fraud and corruption.

The European Federation shall establish a centralized monitoring system to track tax payments across all Member States.

Member-States shall have until December 31th 2031 to reimburse all the bonds contracted before the adoption of the present Regulation. The FTA shall ensure that the Member-States have the necessary funds to fulfill this commitment appropriation.