Brussels, 19 May 2022
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Minimum corporate tax rate of 15% for large multinational corporations
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Implementation deadline 31 December 2022
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MEPs want review clause and impact assessment for developing countries
On Thursday, MEPs approved a Commission proposal implementing the recent international agreement on a global minimum corporate tax rate of 15%.
The report, authored by Aurore Lalucq (S&D, FR) was adopted by by 503 votes in favour, 46 votes against and 48 abstentions.
The text approves the key elements of the Commission’s proposal, notably sticking to the proposed implementation timeline and an implementation deadline of 31 December 2022 with the intention of a swift application of the law.
MEPs did however make changes to the Commission’s proposal. In particular they introduced a review clause which provides for the revision of the annual revenue threshold above which a multinational corporation would be subject to the minimum tax rate. They also want an assessment on the impact of the legislation on developing countries.
MEPs also seek to reduce certain exemptions proposed by the Commission, and to limit the possibility for abuse of the rules, notably by introducing a specific article containing rules to fight tax avoidance schemes.
After the vote Ms Lalucq said, “This agreement is not perfect. We would have for example liked to have a higher tax rate. But it is the result of a compromise. And today, the urgency is for EU minister to reach a deal, and for its rapid implementation. This was the main guiding principle of today’s vote.”
Next steps
The report, which constitutes Parliament’s opinion, is now passed to the Council, which must adopt a final text, by unanimity.
Background
The aim of the directive is to transpose into EU law the reform of the rules on international corporate taxation which were agreed by the OECD/G20 in December 2021. This global agreement aims to ensure a minimum corporate tax rate of 15% for large multinational corporations and constitutes a major step towards an effective and fair system of profit taxation.
Further information
Renew Europe: European Parliament supports the global agreement for a minimum taxation for multinationals
MAY 19, 2022
The Renew Europe Group welcomes today´s Plenary endorsement of the report on a minimum level of taxation for multinational groups (Pillar II), introducing an overall minimum effective tax rate of 15% for large groups operating in the European Union, in line with the OECD/G20 International Framework agreement of October 2021, which establishes a legal framework on tax challenges arising from the digitalisation of the economy.
Our political Group, through its shadow rapporteur MEP Gilles Boyer, advocated for preserving as much as possible the global agreement and the EC´s proposal in order to convey a strong political message of unity when it comes to enhancing the EU´s decision making on tax and budgetary matters.
In this regard, Renew Europe’s substantial demand, agreed with the other two major pro-European parliamentary groups, is to bolster greater exchange of information between Member States and third country jurisdictions through a revision of the Administrative Cooperation Directive to avoid possible advantageous tax arrangements that circumvent the global agreement.
MEP Gilles Boyer (Horizons, France), Renew Europe´s shadow rapporteur on this file, declared:
“With a minimum corporate tax rate of 15% we will fight more efficiently against harmful tax competition and tax evasion in Europe. This is a strong call from the European Parliament for the EU to take the leadership in the implementation of this historic international agreement”.
Source – Renew Europe (via e-mail)