Poland, Sweden, Estonia and Malta block EU agreement on minimum corporate tax

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PARIS – Poland, Sweden, Estonia and Malta on Tuesday blocked a compromise proposed by France on how to implement the minimum corporate tax in the European Union, dealing a blow to the global overhaul cross-border tax rules.

While tax issues require unanimous support across the EU-27, French Finance Minister Bruno Le Maire has said he will bring the issue back on the table at the next ministers’ meeting in April.

“Tax justice takes a long time, but in the end it is important that tax justice wins,” Le Maire said during a meeting with senior tax officials from EU countries.

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After years of negotiations, nearly 140 countries reached a two-pronged deal last October on a minimum tax rate of 15% on multinationals and agreed to make it harder for companies like Google, Amazon and Facebook avoid tax by reserving profits in low-tax jurisdictions. .

France, which currently holds the EU’s rotating presidency, has been pushing for swift EU implementation of the overhaul of cross-border tax rules.

However, in the face of fears from some EU countries that they were not ready, France offered a compromise that pushed back the implementation of the new rules until the end of next year, rather than at the beginning. .

She also offered a firm political commitment not to let the two pillars of the overhaul be separated, but Poland said that did not go far enough and needed stronger legal safeguards.

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“Tax justice means that both pillars are implemented together,” Polish tax chief Magdalena Rzeczkowska told a meeting in Brussels, adding that Warsaw was looking forward to a “more balanced” proposal.

Swedish, Estonian and Maltese officials have also said they cannot sign the deal as it currently stands, although Ireland and Hungary, which have had strong apprehensions in the past, have declared themselves satisfied.

Global tax reform is supposed to be introduced into the laws of countries next year, although it has long been considered very ambitious, in large part because the US administration has struggled to push it through Congress. (Reporting by Leigh Thomas editing by Mark Heinrich)

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