Thursday

7th Jul 2022

France aims for EU minimum-tax deal in June

  • EU Commission vice-president Valdis Dombrovskis and French finance minister Bruno Le Maire after the council meeting (Photo: Council of the European Union)
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The global deal to increase tax paid by multinational companies is being pushed back with the EU aiming to secure an accord in June, hoping to overcome opposition by Poland by then.

The landmark deal, signed by 140 countries in 2021, would ensure multinationals, such as Google or Amazon, pay more tax where they make their profits.

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In the meantime, OECD secretary general Mathias Cormann told the World Economic Forum in Davos on Tuesday (24 May) that the global deal will likely only become operational in 2024. It was originally planned for implementation in 2023.

The deal has come under fire from Republicans in the US Congress, and EU unanimity has also been missing.

On Tuesday, after a meeting of EU economy ministers, France's Bruno Le Maire said he was confident to bring Warsaw onboard and clinch a deal on the implementation of the minimum corporate tax rate in the EU on 17 June, at the ministers' next meeting.

Poland, which has several ongoing conflicts with the EU over judicial independence, has been reluctant to back the deal and has delayed progress.

Warsaw has been concerned that the minimum tax could enter into force without the new rules preventing big corporations from booking profits in the most favourable countries.

Poland wants a legally-binding link between the two pillars of the global tax reform, the tax rate and the introduction of a separately negotiated global levy for the world's largest companies.

Le Maire said officials are working on a diplomatic wording that gives political assurances to Poland that links the two pillars.

However, EU officials have said Poland is using the tax reform to unlock the part of the Covid-19 recovery fund allocated to Warsaw and withheld so far over judicial independence.

EU Commission vice-president Valdis Dombrovskis said on Tuesday that Poland's recovery plan could be approved within a week.

"I think it is feasible that we will be finalising this work even in the next days, or week," Dombrovskis said after the council meeting.

The commission has set three conditions previously, which are dismantling the disciplinary chamber for judges, reforming the disciplinary regime, and reinstating dismissed judges.

Poland has introduced a disciplinary regime for judges that the European Court of Justice said was against EU law, and critics argue it is used to silence those questioning the government.

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