Previously, I published several articles addressing the relationship between the state and the business community, as well as the role of business as a partner of the state in addressing socio-economic challenges. In this article, I intend to expand on the topic and examine the role of European companies in the development of the European Union, given that the Republic of Moldova aspires to become part of it.

First and foremost, it should be noted that European companies collectively generate and contribute approximately 87% of the total tax revenues collected by countries across the continent. In absolute terms, the total contribution administered by businesses (taxes borne directly by companies and taxes collected on behalf of third parties) amounts to more than EUR 6 trillion annually.

The tax contribution of Europe’s business sector is structured into two main categories.

The first category comprises taxes directly borne by companies. These account, on average, for 38.4% of a country’s total tax revenues and are paid directly from companies’ own budgets. They include:

• • Corporate income tax, which accounts, on average, for 11.4% of all tax revenues in Europe (or 3.5% of European GDP);

• • Employers’ social security contributions;

• • Other direct taxes, such as corporate property taxes, environmental taxes and excise duties on production inputs.

The second category consists of taxes collected and remitted by companies. In the EU, businesses act as government collection agents, administering and transferring, on average, 48.4% of total tax revenues. Although these taxes are technically borne by consumers or employees, companies are legally responsible for withholding and transferring them to the authorities.

This category includes:

• • Value Added Tax (VAT), which accounts for approximately 55% of taxes on production and consumption;

• • Personal income tax and employees’ social security contributions, withheld directly from gross salaries;

• • Consumption excise duties, such as those on tobacco, alcohol and fuel, collected at the point of sale.

As these figures demonstrate, European companies play a significant socio-economic role. In turn, the EU supports them, particularly small and medium-sized enterprises (SMEs), through several key instruments.

The EU provides companies with grants, subsidies, loans, guarantees and venture capital through programmes such as InvestEU, Horizon Europe, the Digital Europe Programme and the Single Market Programme, with more than EUR 200 billion allocated through 2027.

Furthermore, European companies are granted access to the world’s largest single market, with no internal customs tariffs, harmonised rules and support for international trade.

Other forms of support available to European companies include:

• • Administrative simplification: reducing bureaucracy through simplification packages, such as the Omnibus packages, and measures addressing late payments;

• • Innovation and the green transition: supporting digitalisation, environmental transition and increased competitiveness through dedicated funding and sustainability guidelines;

• • New legal frameworks: for example, the proposed “EU Inc.” framework, designed to establish a single legal regime and enable faster digital incorporation, making it easier to create and expand businesses across the European Union.

In addition, the European Union protects and supports European companies through a comprehensive set of economic, legal and trade policies designed to ensure a fair and competitive business environment.

In this context, several mechanisms are worth highlighting:

• • EU competition and antitrust policy: ensuring fair competition and preventing anti-competitive practices.

• • Control of foreign subsidies: the EU monitors and may restrict subsidies granted by non-EU countries to companies competing in the European market.

• • Intellectual property protection: companies can register trademarks, designs and patents at the EU level through the European Union Intellectual Property Office (EUIPO), obtaining exclusive rights across all 27 Member States.

• • Single Market regulation: ensuring the free movement of goods, services, capital and people, thereby providing businesses with access to a market of more than 450 million consumers without internal customs barriers.

• • Trade defence instruments: the EU applies anti-dumping duties and countervailing measures against unfair imports from non-EU countries in order to protect European industries.

• • Bureaucracy reduction and digital initiatives: projects such as the European Business Wallet are being developed to facilitate companies’ cross-border operations.

All the above illustrates how the relationship between the EU and European businesses works: companies are provided with favourable operating conditions, which, in turn, have a positive impact on socio-economic indicators.

These mechanisms deserve careful consideration not only by the authorities of the Republic of Moldova but also by domestic businesses, as they are highly relevant in the context of the European integration process in which our country is engaged.

Ion Scurtu
Businessman, Investor and Philanthropist