EU countries agree on a global corporate tax
The Council of the European Union (EU) announced that the representatives of the member states have reached an agreement on international taxation.
The statement read: “EU member states agreed to implement the minimum tax component, known as the second pillar of the Organization for Economic Co-operation and Development (OECD) international tax reform, at the EU level.”
Noting that unanimity was achieved among Member States on the agreement, it was noted that the official approval process would be carried out in writing.
In the statement, it was noted that the effective implementation of the regulation would avoid the race for low corporate taxes.
AT LEAST 15 PERCENT OF PROFITS WILL BE TAXED
With the agreement, it was established that the profits of multinational or local companies with a total annual turnover of at least 750 million euros will be taxed at least 15 percent, and the new rules will allow multinational companies to pay the minimum global rate of corporate tax. .
In the statement, it was stated that the tax directive should be transposed into the national laws of member states by the end of 2023.
In October last year, a consensus was reached on the global regulation of corporate tax, which the OECD has been working on since 2012.
The agreement stipulates that global companies, including Internet companies such as Google, Amazon, Microsoft and Facebook, will be subject to a tax rate of at least 15 percent.
The agreement is expected to make it more difficult for multinational companies to evade taxes by establishing their headquarters in countries that offer attractive tax rates.
HUNGARY DID NOT APPROVE
Ratification of the tax treaty by the EU required unanimous consent. Recently, Hungary did not approve the global tax treaty and financial aid of 18 billion euros to Ukraine in 2023.
As a result of negotiations between member states, the approval of the plan drawn up by Hungary to receive a grant of 5.8 billion euros from the EU recovery funds established to combat the economic consequences of the Covid-19 epidemic, and the funds to be provided to Hungary under the mechanism linking the EU budget to the rule of law. After the decision to freeze 3 billion euros until the necessary measures are taken, Hungary lifted its veto.
The EU expects progress from Hungary in several areas, such as judicial independence, control of spending, the fight against corruption and reporting, to release all funds. (AA)