Malta joins Poland, Sweden and Estonia to block EU corporate tax rate

Malta has been joined by Poland, Sweden, and Estonia to block a French-proposed compromise on how to implement minimum corporate tax across the European Union, dealing a blow to the global overhaul of cross-border tax rules.

Malta had already told the European Council it will not be giving any green light on a Commission proposal for a global minimum tax for multinationals, without its reservations being given a proper hearing.

French Finance Minister Bruno Le Maire said that he would put the issue back on the table the next time ministers meet in April. “Tax justice takes a long time but in the end it's important that tax justice wins,” Le Maire said.

“A small group of member states informed us of their reticence, and we will try to provide them with a response in the coming weeks. For example, the deadline for transposing the diective, some states said the deadline was too tight, so we suggested that it is extended to the 31 December 2023.”

Nearly 140 countries reached a two-track 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 to avoid tax by booking profits in low-tax jurisdictions.

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

It recently proposed a compromise that pushed back implementation of the new rules until the end of next year, rather than the beginning.

It also proposed a firm political commitment to not let the two pillars of the overhaul be separated, but Poland said that did not go far enough and it needed stronger legal assurances. “Tax justice means both pillars are implemented together,” Polish revenue chief Magdalena Rzeczkowska told a meeting in Brussels.

Reuters reportedthat Swedish, Estonian and Maltese officials also said that they could not sign on to the deal as it currently stands although Ireland and Hungary, which have had strong misgivings in the past, said they were satisfied.