MEPs vote to approve Commission’s proposal for a minimum global tax rate
MEPs on Thursday broadly approved the Commission proposal implementing into law the international agreement on a global minimum corporate tax rate of 15%.
28 April 2022, 5:15pm
Sebastian Vassallo
Sebastian Vassallo
2 min read
The report, authored by Aurore Lalucq (S&D, FR) was adopted by the Economic and Monetary Affairs committee by 46 votes in favour, 4 votes against and 7 abstentions.
It approves the principal elements of the Commission proposal, notably sticking to the proposed implementation schedule and the implementation deadline of 31 December 2022 with an aim to having the law rapidly in force.
However the adopted report does make certain modifications to the Commission’s proposal. One of which is the addition of a review clause which would allow the annual revenue thresholds to be reviewed, thresholds above which a multinational corporation would be subject to the minimum tax rate. The amendments also call for an impact assessment of this legislation with regard to developing countries
MEPs also sought to reduce certain exemptions proposed by the Commission, and limit the opportunities for loophole abuse, notably by introducing a specific article containing rules to fight tax avoidance schemes.
Following the vote, Lalucq said, "This agreement is not perfect. We would have for example liked to have a higher tax rate. But it is the result of a compromise. And today, the urgency is for a deal to be reached in the Ecofin, for a rapid implementation. This was the main guiding principle of today’s vote."
The aim of this new directive is to transpose into EU law a reform of the rules on international corporate taxation which were agreed by the OECD/G20 in December 2021. This global agreement is intended to achieve a minimum corporate tax rate of 15% for large multinational corporations and constitutes a major step towards an effective and fair system of profit taxation worldwide. The Commission made its proposal a few days after the international agreement was reached.
Next the report will be tabled for a plenary vote, after which it will constitute the Parliament’s opinion. This opinion will need to be considered by the member states when they adopt the final text by unanimity.
This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The action was co-financed by the European Union in the frame of the European Parliament's grant programme in the field of communication. The European Parliament was not involved in its preparation and is, in no case, responsible for or bound by the information or opinions expressed in the context of this action. In accordance with applicable law, the authors, interviewed people, publishers or programme broadcasters are solely responsible. The European Parliament can also not be held liable for direct or indirect damage that may result from the implementation of the action.
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