Taxes: Europeans want to bypass Hungary’s veto on minimum tax on big multinationals

The topic was not on the agenda of the meeting of European finance ministers who gathered in Prague on Friday 9 and Saturday 10 September, but it was invited to the discussion table between the treasurers of the old continent. Frenchman Bruno Le Maire and his four colleagues – German Christian Lindner, Spanish Nadia Calvino, Italian Daniel Franco and Dutch Sigrid Kaag – took advantage of this forum to renew the project and introduce a minimum tax of 15%. Profits of large multinational companies, which are now blocked by Hungary.

“We are ready [le] to be implemented in 2023 and [à utiliser] All legal means [pour y parvenir] »said the five ministers in a joint text released mid-day on Friday. The message is clear: Europeans will find a way forward even if Budapest does not lift the veto. In addition, he signed the Organization for Economic Co-operation and Development (OECD) agreement, under the auspices of which 140 countries committed to adopting a minimum tax in 2021.

Over the past few weeks, the commission has been consulting with capital cities to find out which of them would be a “Strengthened Cooperation” which would enable them to carry out this undertaking without the unanimity of the twenty-seven, as is usually the case in matters of taxation. This procedure allows the executive of the Commonwealth to present a proposal which must be accepted by the member states by a qualified majority and which can be put into effect when at least nine of them decide to implement it.

“Tax law should be a priority of the European Union”

On June 17, twenty-six other Europeans in addition to Hungary voted in favor of the European Union (EU) adopting a 15% minimum tax on the largest groups. But some of them, such as Ireland, Malta, Luxembourg or Estonia, have previously refused. “Eventually they followed. But there is nothing to say that they will participate in enhanced cooperation.– explains the diplomat. Especially since this mechanism is not appreciated by small countries, which see it as a way of bypassing the right of veto.

European countries that wish to move forward can do so independently by submitting a text to their national parliament, as long as they are signatories to the OECD agreement. “We can follow more member states this way”, continues this diplomat. Berlin is already working on a bill. “Tax law should be a priority of the European Union. We will introduce a minimum corporate tax from 2023, either through the European route or through the national route.– says Bruno Le Maire.