Despite a new compromise proposal put forward by the French Presidency of the Council of the European Union (see EUROPE 12910/14), EU Finance Ministers failed to reach a unanimous political agreement on the proposed directive that incorporates Pillar II of the OECD agreement on corporate tax reform into the EU.
Although, according to French Minister Bruno Le Maire, the French authorities have “responded to requests” from doubtful Member States, Sweden, Poland and Malta have indeed indicated that they are not in a position to accept the text.
In the public debate on the legislative proposal, Sweden expressed “full support” for the directive and “welcomed the changes to the transposition date”. But, in agreement with the national parliament, it considered that it was “too early to agree on a general approach on the directive”.
However, the proposal to postpone the deadline for the entry into force of the future rules to 31 December 2023 instead of 1 January 2023 did convince those countries that had doubts about it, in particular Luxembourg and Hungary, which still consider it “ambitious”. However, the OECD agreement provides for an application in 2023.
Poland, on the other hand, re-emphasised the importance of linking Pillar II of the international tax agreement with Pillar I, on the reallocation of taxing rights for multinationals. “Tax justice means that both pillars are implemented; linking them is a fundamental principle”, said its Polish representative.
Poland, Hungary and Malta would like to see the implementation dates of the two pillars aligned. Poland also expressed its willingness to include “legally binding insurance”.
Malta would like to see an extension of the income inclusion rule. In the last compromise, its application became optional for 5 years, for all Member States with no more than 10 entities concerned.
“We have been fighting for 5 years, we are not 3 weeks away”, conceded Bruno Le Maire, who “hopes to be able to reach an agreement at the next Ecofin Council”, which will take place on Tuesday 4 April in Luxembourg.
Paolo Gentiloni, European Commissioner for the Economy, recalled that “it is in the interest of Member States to implement the rules in time, because if jurisdictions do not do so, this will immediately lead to a loss of tax revenue”.
This position is shared by Aurore Lalucq (S&D, France), who believes that with the Ukrainian conflict, “we will need new money, and therefore new taxes”. Contacted by EUROPE, she regretted “the position of certain countries that are blocking”. Like other MEPs who took to Twitter, such as Claude Gruffat (Greens/EFA, France), the MEP wanted to “break the ultimate taboo of unanimity” on tax matters.
The European Parliament’s Committee on Economic and Monetary Affairs will vote on the draft report for opinion on the text on Thursday 28 April. (Original version in French by Anne Damiani)