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Five big EU states to implement minimum corporate tax if no EU deal

Stock Markets Sep 09, 2022 10:55AM ET
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© Reuters. FILE PHOTO: A vendor receives a five Euro bank note from a customer at the central market in Athens, Greece, July 8, 2015. REUTERS/Christian Hartmann

PARIS (Reuters) - The governments of the European Union's five biggest economies said on Friday they would implement a global minimum corporate tax next year by "any possible legal means", if Hungary does not lift its opposition at the EU level.

Hungary blocked the European Union's adoption of a 15% minimum corporate tax at the last minute in June, preventing a deal that would have turned a global reform into law across the bloc.

"Should unanimity not be reached in the next weeks, our governments are fully determined to follow through on our commitment," finance ministers from France, Germany, Italy, Spain and the Netherlands said in a joint statement.

"We stand ready to implement the global minimum effective taxation in 2023 and by any possible legal means," they added in the statement, issued on the sidelines of a meeting with EU counterparts in Prague.

They did not elaborate what form that could take, but French officials have raised the possibility of resorting to an EU legal procedure know as enhanced cooperation that requires at least 10 member states. They can also adopt the legislation individually at the national level.

"Tax justice is a priority for the European Union," French Finance Minister Bruno Le Maire said, adding that the reform would be implemented next year "either at the European level or at the national level".

Hungary has argued that approval of the plan could harm the European economy, but some European officials suggest Budapest is using its opposition as a bargaining chip to gain access to billions of blocked EU euros worth of recovery funds.

The minimum tax is the second of a two pillar deal reached last year among nearly 140 countries to rewrite the rules of cross-border taxation to take better account of how big internet companies can book profits in low-tax countries.

The ministers also said they were "fully committed" to complete work on the first pillar, on a better reallocation of tax rights between governments, with the objective of signing a multilateral convention by mid-2023.

Five big EU states to implement minimum corporate tax if no EU deal
 

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