Czech Finance Minister Zbyněk Stanjura said on Friday 9 September in Prague that there was still time to find a solution that would allow for a unanimous agreement in the Council of the European Union on the transposition of the OECD agreement on minimum taxation of multinationals (pillar II) in the EU.
“The task of the Presidency country is to look for a compromise with everyone. We have time, we can negotiate and look for solutions all Member States can be happy with”, said Mr Stanjura, convinced that this is “the best way forward”. Giving himself until the end of 2022 to act, he advocated patience in negotiations that could lead “to the desired result, so unanimous agreement”.
The Vice-President of the European Commission, Valdis Dombrovskis, stressed that the best way out of the current deadlock, caused by Hungary’s veto after Poland’s veto on the specific Directive proposal (see EUROPE 12974/8), was “clearly a European solution”.
The two political leaders were invited to react to the declaration of the five largest euro area economies - Germany, France, Italy, Spain, the Netherlands - willing to overcome the deadlock. While they assure that “their first goal” is to reach “a consensus”, these countries warn their partners that, in the absence of a unanimous agreement “in the next weeks”, they will move forward in order to concretise, “in 2023 and by any possible legal means”, their commitment to tax multinationals up to 15%.
One possibility could be to initiate work on setting up ‘enhanced cooperation’, an initiative that requires at least nine Member States. The European Commission is in a hurry to sound out the Member States ready to go down this path by the next Ecofin Council on Tuesday 4 October in Luxembourg.
“Many options are on the table. An enhanced cooperation may be a solution. If it is not possible, we’d have to envisage all options including the national option”, said French Minister Bruno Le Maire on his arrival in Prague. He added: “We should not talk, decide” and implement the OECD agreement “no later than next year”.
“Enhanced cooperation is possible, but not normal”, said Mr Stanjura.
Another possibility is to legislate at national level to implement the OECD agreement. The German Minister, Christian Lindner, spoke of the German government’s agreement to implement the agreement, “if necessary by national law”.
The five euro area countries, whose Ministers appeared together in Prague, signal that they remain “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” (pillar I of the OECD agreement).
See the declaration of the five countries: https://aeur.eu/f/30w (Original version in French by Mathieu Bion)