(Source: European Parliament)
Minimum corporate tax rate of 15% for large multinational corporations
Implementation deadline 31 December 2022
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.”
The report, which constitutes Parliament’s opinion, is now passed to the Council, which must adopt a final text, by unanimity.
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.