France, Germany, Italy, the Netherlands and Spain have issued a joint statement committing to the swift implementation of Pillar Two in the EU 2023 ‘'by any possible legal means’.
The statement was issued after an informal meeting of EU finance ministers in Prague on 8 September. It follows successive failed attempts at ECOFIN meetings to obtain unanimous agreement on the proposed Directive ensuring a global minimum level of taxation for multinational groups. At present, Hungary is currently the only member state that is vetoing the adoption of the proposals.
The joint statement reads: ‘As inflation hits heavily the spending power of our fellow citizens, companies must pay their fair share of the burden to alleviate the impact of the global energy crisis. This is why we reaffirm today our strengthened commitment to swiftly implement the global minimum effective corporate taxation. It is a key lever for further tax justice through a more efficient fight against tax optimization and evasion.
‘At the June 2022 Ecofin, 26 out of 27 EU member states expressed their willingness to implement this important step towards tax justice, and our first goal remains to gather a consensus. Should unanimity not be reached in the next weeks, our governments are fully determined to follow through on our commitment. We stand ready to implement the global minimum effective taxation in 2023 and by any possible legal means. We are also fully committed to complete the work on the better reallocation of taxing rights from huge global multinationals’ profits with the objective of signing a multilateral convention by mid-2023.’
The Czech Council Presidency is expected to pursue unanimity in the next formal ECOFIN meeting on 4 October. However, as professional firm EY notes: ‘If Hungary does not agree to the proposed EU directive, EU Member States could consider implementing the rules by using the ‘enhanced cooperation’ process, which would not require Hungary’s participation. Alternatively, each country could implement via their own national rules.’
France, Germany, Italy, the Netherlands and Spain have issued a joint statement committing to the swift implementation of Pillar Two in the EU 2023 ‘'by any possible legal means’.
The statement was issued after an informal meeting of EU finance ministers in Prague on 8 September. It follows successive failed attempts at ECOFIN meetings to obtain unanimous agreement on the proposed Directive ensuring a global minimum level of taxation for multinational groups. At present, Hungary is currently the only member state that is vetoing the adoption of the proposals.
The joint statement reads: ‘As inflation hits heavily the spending power of our fellow citizens, companies must pay their fair share of the burden to alleviate the impact of the global energy crisis. This is why we reaffirm today our strengthened commitment to swiftly implement the global minimum effective corporate taxation. It is a key lever for further tax justice through a more efficient fight against tax optimization and evasion.
‘At the June 2022 Ecofin, 26 out of 27 EU member states expressed their willingness to implement this important step towards tax justice, and our first goal remains to gather a consensus. Should unanimity not be reached in the next weeks, our governments are fully determined to follow through on our commitment. We stand ready to implement the global minimum effective taxation in 2023 and by any possible legal means. We are also fully committed to complete the work on the better reallocation of taxing rights from huge global multinationals’ profits with the objective of signing a multilateral convention by mid-2023.’
The Czech Council Presidency is expected to pursue unanimity in the next formal ECOFIN meeting on 4 October. However, as professional firm EY notes: ‘If Hungary does not agree to the proposed EU directive, EU Member States could consider implementing the rules by using the ‘enhanced cooperation’ process, which would not require Hungary’s participation. Alternatively, each country could implement via their own national rules.’
