Government expects EU agreement this week on multinational 15% tax

  • Lusa
  • 18 January 2022

Finance minister João Leão said this Tuesday it expects an agreement this semester among European Union (EU) member states for 15% minimum taxation on multinationals' profits in the EU.

Portugal’s government said on Tuesday it expects an agreement this semester among European Union (EU) member states for 15% minimum taxation on multinationals’ profits in the EU, as agreed at the OECD, to come into force in 2023.

“It was a major priority of the French presidency and with the support of many finance ministers to approve this semester an agreement to approve the directive that will ensure to start already in 2023 the minimum taxation of 15%,” as agreed at the Organisation for Economic Cooperation and Development (OECD) last October, Finance minister João Leão said this Tuesday.

Speaking to the Portuguese press after today’s Ecofin meeting in Brussels, Leão pointed out that “it was [agreed] that the French presidency’s main priority was to approve the European directive that will set minimum taxation for multinationals in Europe at 15%.

“This will allow everyone to bear a fair and transparent share of the financing of the common good and public services,” he pointed out, speaking of an “important agreement to avoid unfair competition and a race […] in terms of financing and competition between states.”

According to Leão, “all [EU] countries are in agreement with the implementation” of this taxation, with the majority, including Portugal, supporting the French presidency “towards a quick approval of the directive”.

Last December, the European Commission proposed minimum taxation of 15% on the profits of multinationals in the EU, as agreed in the OECD, aiming for fiscal “equity and stability” in the EU.

Speaking at the time at a press conference in Brussels, the European Commissioner for the Economy, Paolo Gentiloni, specified that “the proposal for a directive implementing the second pillar of the international agreement will guarantee a minimum effective tax rate of 15% for large groups with an annual turnover of more than €750 million which have their parent company or a subsidiary in the EU”.

The proposal then sets an effective tax rate of 15% in the EU, as agreed by 137 countries in the OECD, and includes a common set of rules on the calculation method to apply it consistently and adequately.

This proposal has now been examined by EU finance ministers, with Brussels hoping for an agreement between member states still during the French presidency of the Council this first half of 2022.