EU push for quick adoption of minimum corporate tax stumbles
Poland, Sweden, Estonia and Malta block French compromise on overhaul of cross-border tax rules
Paris — Poland, Sweden, Estonia and Malta on Tuesday blocked a French-proposed compromise on how to implement minimum corporate tax across the EU, dealing a blow to the global overhaul of cross-border tax rules.
As tax issues require unanimous backing in the 27-nation EU, French finance minister Bruno le Maire said that he would put the issue back on the table the next time ministers meet in April.
“Tax justice takes a long time but in the end it’s important that tax justice wins,” Le Maire told a meeting with top tax officials from EU countries.
After years of negotiations nearly 140 countries reached a two-track deal last October on a minimum tax rate of 15% on multinationals and agreed to make it harder for companies such as Google, Amazon and Facebook to avoid tax by booking profits in low-tax jurisdictions.
France, which holds the EU’s rotating presidency, has been pushing for quick EU implementation of the overhaul of cross-border tax rules.
However, in the face of concerns from some EU countries that they would not be ready, France proposed a compromise that pushed back implementation of the new rules until the end of 2023, rather than the beginning.
It also proposed a firm political commitment to not let the two pillars of the overhaul be separated, but Poland said that did not go far enough and it needed stronger legal assurances.
“Tax justice means both pillars are implemented together,” Polish revenue chief Magdalena Rzeczkowska told a meeting in Brussels, adding that Warsaw looked forward to a “more balanced” proposal.
Swedish, Estonian and Maltese officials also said that they could not sign on to the deal as it stands, though Ireland and Hungary, which have had strong misgivings in the past, said they were satisfied.
The global tax reform is supposed to be brought onto countries’ lawbooks in 2023, though that has long been seen as highly ambitious in large part because the Biden administration has struggled to push it through Congress.
Reuters