15/12/22

EUROPE: Linking Ukraine aid to corporate tax is blackmail, says Poland PM Morawiecki.

As published on tvpworld.com, Thursday 15 December, 2022.

Linking the issue of aid for Ukraine to the minimum corporate tax for large companies is a form of blackmail, Poland’s Prime Minister Mateusz Morawiecki said on Thursday.

“Combining aid for Ukraine with such distant topics which have nothing to do with aid like corporate tax is unnecessary, it is a mistake and an attempt at blackmail,” PM Morawiecki told reporters at a European Union summit in Brussels.

On Thursday, Poland was holding up the European Union's formal adoption of a minimum corporate tax for large companies.

The minimum tax was part of a complex deal reached by EU governments on Monday night. The deal also included EUR 18 billion for Ukraine next year, the approval of Hungary's recovery plan and the suspension of some EU budget funds for Budapest.

Initially, the pact was to be signed off in a “written procedure” by Wednesday. Poland, however, has twice demanded an extension of the deadline for this, the latest of which is now 12:00 p.m. (1100 GMT) on Thursday.

It is likely that a summit of EU leaders in Brussels on Thursday will see the resurgence of the issue.

As many as 140 countries in the Organisation for Economic Cooperation and Development agreed on the global minimum corporate tax of 15 percent in 2021. To aim was to prevent large international firms from shifting profits around the globe to cut their tax bills and thereby eroding countries' tax bases.

Affected by the minimum tax will be companies with an annual turnover of at least EUR 750 million and each EU country will have to adopt it into national law by the end of 2023. Large firms will have to pay the minimum rate from the start of 2024.