Unlocking the Social Economy 2025

3.1 Dedicated action plans for the social economy European Commission transition pathway for proximity and social economy  BOX 11 The transition pathway aims to enable actors in the ecosystem to deliver on the twin transition while fostering a more sustainable and resilient economy in the EU. The pathway identifies 14 action areas and 30 specific actions, including:  Creating financial incentives and supportive regulation for green and circular social economy business modelsCertification, labelling and self-regulation Public and private tech partnerships and support Supporting digital social innovation (DSI) and “tech for good” entrepreneurship Source: European Commission. (n.d.). The transition pathway for the proximity and social economy. https://single-market-economy.ec.europa.eu/sectors/ proximity-and-social-economy/transition-pathway_en. International organizations and national governments have developed dedicated action plans to strengthen the social economy in light of the green and digital transitions. The European Commission, for example, introduced the transition pathway on proximity and social economy in November 2022. The Organisation for Economic Co-operation and Development (OECD) adopted a Recommendation on the Social and Solidarity Economy and Social Innovation in June 2022.64 Also, the United Nations General Assembly adopted a Resolution in April 2023 and November 2024 titled "Promoting the Social and Solidarity Economy for Sustainable Development" which encourages its member states to "promote and implement national, local and regional strategies, policies and programmes for supporting and enhancing the social and solidarity economy as a possible model for sustainable economic and social development". Economic equity dimension: All 3.2 Reduced taxation of public benefit companies Economic equity dimension: Employment and job transition Another mechanism policy-makers have used is to favour companies that benefit the public through favourable tax schemes. In the European Union, the most widespread tax benefit for public benefit companies is a corporate tax exemption on retained profits. Another type of tax incentive, albeit less widespread, consists of the exemption from or reduced rate of VAT (value-added tax). This can be granted not only on the basis of the services provided but also on the basis of legal status and/or legal form. As two examples, in Belgium, under certain conditions, WISEs benefit from a reduced VAT rate; in Italy, social cooperatives are exempted from paying national insurance contributions for the disadvantaged workers they have integrated. A third important type of tax benefit is the income tax reductions granted to private (both individuals and companies) and/or institutional donors of social enterprises.65 Recognizing further that the social and solidarity economy contributes to more inclusive and sustainable economic growth by finding a new balance between economic efficiency and social and environmental resilience that fosters economic dynamism, encourages a just and sustainable digital transition, social and environmental protection and sociopolitical empowerment of individuals over decision-making processes and resources. Source: United Nations Resolution 77/281 of 27 April 2023. Unlocking the Social Economy: Towards Equity in the Green and Digital Transitions 23