The European Commission is reworking a proposed tax on Europe's largest companies in an effort to clear the way for a deal on the bloc's next long-term budget, Politico reports. At issue is a planned levy on firms with an annual turnover above €100 million, which business lobbies and national governments have criticised, according to the same report.

The levy matters well beyond the companies that would pay it. Brussels wants it to become a new own resource — revenue that feeds the EU budget directly, rather than arriving as a contribution wired in from each national treasury. New own resources are central to how the Commission proposes to finance its next multiannual financial framework, the seven-year spending plan that fixes the Union's priorities.

That is why the tax can hold up everything else. Change a headline revenue source and you reopen the whole financing package, and the budget cannot be settled while a key source of money is still contested.

Why a single tax can stall an entire budget

Here is the institutional catch. Most EU laws pass by a qualified majority — a weighted vote in which no single country holds a veto. Own resources do not work that way. A decision to create a new source of EU revenue must be agreed unanimously by the Council, where every member state sits, after consulting the European Parliament. It must then be ratified by all 27 member states in line with their own constitutional requirements — in practice, a national parliamentary vote in each capital.

That double lock — unanimity now, ratification afterwards — hands every government, and in some cases every national parliament, an effective veto. It is the highest procedural bar in the EU's toolkit, and it is why a levy that reads like a technical tax question can jam an entire budget.

What the pushback is really about

The criticism, per Politico, is arriving from two directions at once: business lobbies that would rather not carry a new EU-level charge, and national governments wary of the design. Both groups sit squarely on the path the levy has to travel — governments literally hold the votes, and lobbies have the ear of the capitals that cast them.

Hypothesis: the redesign is driven less by the economics of the tax than by the arithmetic of unanimity. Supporting this: because a single 'no' in the Council can sink an own resource, the Commission has a strong incentive to soften the levy until every capital can live with it. Against this: the reported objections also touch the substance — who pays, and how much — so the changes may reflect genuine disagreement over the tax itself, not only procedural bargaining. The public detail so far is too thin to say which dominates.

What to watch

Watch whether the Commission raises the €100 million threshold, narrows what the levy applies to, or swaps it for a different own resource altogether — each is a way to buy votes. Watch, too, which capitals signal a red line: under unanimity, one hold-out is enough. And because ratification comes only after the Council agrees, even a deal struck in Brussels would still face 27 separate national approvals before any money moves.