The European Commission presents its proposals for the implementation of the global agreement on a tax floor for corporations and new sources of finance.
At its last meeting before the Christmas holidays, the European Commission achieved the self-imposed goal of being the global pioneer in matters of tax justice. On Wednesday, the Brussels authority presented its proposals for the concrete implementation of a minimum tax rate for large international companies, which the world community had agreed on in October with a few exceptions (only Kenya, Nigeria, Sri Lanka and Pakistan said no at the time). The global deal was initiated by the OECD industrialized nations’ club and the G20 group, who went green in June and July.
The international compromise stipulates that corporations operating across borders should pay a tax rate of at least 15 percent regardless of their headquarters – starting in 2023. According to estimates by the OECD, the implementation of the reform will increase state tax revenues around the globe by 130 billion euros Year increase – money urgently needed to fight global warming. The Commission’s current proposal is based on the fixed key tax data. The draft directive presented on Wednesday stipulates that EU member states demand a top-up tax from an international corporation if this company reports an effective tax burden below the new minimum of 15 percent at the location – or is based in a country, that does not participate in the global minimum tax.