Five major EU states will introduce minimum corporate tax in the absence of an EU deal

PARIS – Governments of the European Union’s five largest economies said on Friday they would implement a global minimum corporate tax next year by “all legal means possible”, if Hungary does not lift its opposition at EU level.

Hungary blocked the European Union’s passage of a minimum corporate tax of 15% at the last minute in June, preventing a deal that would have turned global reform into law across the bloc.

“If unanimity is not reached in the coming weeks, our governments are fully determined to respect our commitment,” said the finance ministers of France, Germany, Italy, Spain and the Netherlands. Down in a joint release.

“We are ready to implement global minimum effective taxation in 2023 and by all legal means possible,” they added in the statement, released on the sidelines of a meeting with their EU counterparts in Prague.

They did not say what form this might take, but French officials have raised the possibility of using an EU legal procedure known as enhanced cooperation which requires at least 10 member states. They can also adopt legislation individually at the national level.

“Tax justice is a priority for the European Union,” said French Finance Minister Bruno Le Maire, adding that the reform would be implemented next year “either at European or national level.”

Hungary has argued that approval of the plan could harm the European economy, but some European officials suggest that Budapest is using its opposition as a bargaining chip to gain access to blocked billions of euros in recovery funds. RELAUNCH.

The minimum tax is the second in a two-pillar agreement reached last year between nearly 140 countries to rewrite the rules of cross-border taxation to better reflect how big internet companies can make profits in low-tax countries.

The ministers also said they were “fully committed” to completing work on the first pillar, on a better redistribution of tax rights between governments, with the aim of signing a multilateral convention by mid-2023.