December 19, 2022
Following months of debate, leaders of the European Union finally agreed to embrace a proposal for a worldwide minimum tax of 15% on multinational corporations. The historic agreement between almost 140 nations aims to put an end to governments competing to slash taxes in order to entice the richest companies in the world to their territory.
Paolo Gentiloni, the EU’s commissioner for the economy, declared that “today the European Union has taken an important step towards tax fairness and social justice.”
“Addressing the difficulties a globalized economy brings requires little taxation,”
The plan was developed under the Organization for Economic Cooperation and Development’s direction and was already supported by Washington and some significant EU economies.
However, the European Union’s 27 member states have previously postponed the implementation of the minimum tax because they voiced opposition or used obstructionist measures.
Poland most recently obstructed the official passage of the measure this week while debating unrelated measures like penalties against Russia.
Such hesitations, however, were resolved during the summit on Thursday, and as a result, the tax will now be implemented throughout the region at the end of 2019.
The choice was praised by leaders.
Olaf Scholz, the chancellor of Germany, described it as a “project near to my heart,” and Emmanuel Macron, the president of France, claimed that France has been promoting the notion for more than four years.
One element of the OECD accord, known as Pillar Two, is the global minimum tax.
The first pillar, which calls for taxing businesses where they generate income in order to prevent tax fraud, particularly targets large internet enterprises.
It requires a global accord that is still being finalized.
Source: France24
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