03/17/2022

EU Lacks Consensus on Global Tax Deal

The U.S. Treasury Secretary has endorsed the global tax plan

European Union (EU) finance ministers met earlier this week in Paris, where Malta, Poland and Sweden declined to back a key pillar of the Organization of Economic Cooperation and Development’s (OECD) global tax deal.

The OECD plan, which would impose a 15 percent global corporate minimum tax on “consumer-facing” digital giants like Apple, Facebook, Google and Twitter, has the backing of nearly 140 countries. OECD wants to finalize the agreement soon and implement it by 2023.

France has been pushing for quick EU implementation of cross-border tax rules, but with some countries expressing concern they would not be ready in time, a compromise was proposed to push back implementation of the new rules until the end of next year.

The new global tax deal requires unanimous backing from the 27 countries in the EU and French Finance Minister Bruno Le Maire said the issue will be back on the table at the finance ministers’ next meeting in April.

“Tax justice takes a long time, but, in the end, it’s important that tax justice wins,” Le Maire told reporters this week.

Treasury Secretary Janet Yellen has endorsed the global tax plan for the United States but Republican members of the Senate Finance Committee are still concerned about the effect of the OECD agreement on U.S. competitiveness and tax revenue.

This article was provided to OSAP by ASAE's Power of A and Inroads.