Estonia is not in favor of a comprehensive minimum corporate tax in its current form because, according to the Minister of Finance, it would go further than originally planned.
Estonian Finance Minister Keit Pentus-Rosimannus (Reform Party) told Estonian Public Broadcasting that the current proposal for a European Union directive on the subject does not let EU member states decide for themselves. they apply the minimum corporate tax. “An agreement at OECD level left this option, so the European Commission went further than that,” the minister said.
Politico reported on Jan. 18 that three EU countries — Estonia, Hungary and Poland — have upended the bloc’s efforts to introduce a 15 percent overall minimum corporate tax.
The finance ministers of these countries have also demanded that the initiative be conditional on the rollout of a global levy on the world’s 100 largest companies, which is expected to be approved in June and introduced in 2023. Their concern is that the US President , Joe Biden, will fail to find the congressional support he needs to implement the same rules, leaving Europe at an economic disadvantage, Politico said.
The tax rate is part of a global agreement that the Organization for Economic Co-operation and Development – known as the OECD – negotiated last fall to eliminate tax havens and ensure that the world’s multinational companies — including the tech giants — are paying their share of taxes.
According to the Estonian interpretation, the OECD agreement does not mean that Estonia has to apply the global tax at the national level. The proposed European Union directive, however, must ensure that all member states apply the tax equally and do not contradict basic EU principles, Estonian public broadcasting reported.
For the EU directive to come into force, all member states must support it.
The cover image is illustrative. Photo by Shutterstock.