Poland ready to lift objection to minimum corporate tax

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Poland is set to lift its opposition to a directive the EU wants to use to implement the global minimum corporate tax, raising hopes the measure will become law in all 27 member states.

Warsaw is expected to signal its willingness to accept the measure at a meeting of EU ambassadors in Brussels this morning, according to five people familiar with the talks.

If no other member state raises last-minute objections, the move would pave the way for an agreement between the 27 capitals when finance ministers meet in Luxembourg on Friday.

A decision by Poland to waive its right of veto would represent a leap forward for the EU, after last year’s international agreement in which 136 countries supported the introduction of a new minimum effective tax rate of 15 percent on large corporations, known as Pillar Two.

Pillar 1 of the same OECD agreement would force the world’s 100 largest multinationals to declare their profits and pay more taxes in the countries where they operate, but this measure has become bogged down in international negotiations and EU implementation plans have been delayed.

The EU is working to translate the second pillar agreement into national law via a directive, which will require unanimous consent. EU officials have claimed Poland previously dragged its feet in part because of the commission’s earlier refusal to approve its €36 billion recovery fund offer.

However, this month’s agreement on the Polish recovery plan between commission chair Ursula von der Leyen and Polish Prime Minister Mateusz Morawiecki removed that hurdle.

Diplomats said they would carefully monitor Hungary’s position at this morning’s meeting of ambassadors in Brussels. Budapest has yet to strike a deal on its own turf for the stimulus package due to an impasse over rule of law standards.

Poland’s finance ministry could not immediately be reached for comment.

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