After a long blockade, the EU states have agreed on an important directive for the implementation of the international minimum tax for large companies. This was announced by the current Czech EU Council Presidency after a meeting of the permanent representatives of the member states in Brussels.
The aim of the directive is to prevent corporate profits from being shifted to tax havens. International companies with at least 750 million euros in sales per year should therefore pay at least 15 percent tax, regardless of where they are based. The directive is to be transposed into national law by the end of 2023.
An agreement on the text was prevented only by Hungary. In the past few days, however, countries like Germany have threatened the government in Budapest with blocking approval of the Hungarian plan to use EU corona aid in return. As a result, 70 percent of the available EU funds of 5.8 billion euros would have expired at the end of the year.
International tax reform in progress
Along with the minimum tax directive, there was also an agreement on the Hungarian Corona Aid Plan. According to the EU Commission, however, it also stipulates that payments can only be made if a total of 27 requirements are met. This is to ensure that rule of law standards are observed and that EU funds are not misappropriated in the country.
Last year, the EU and the USA, together with around 130 other countries, agreed on the major project of an international tax reform. A second part is intended to ensure that international digital corporations such as Facebook are not only taxed in their home country, but also where they actually do business. However, this part of the project is still a work in progress and is far from being implemented.
