18/07/22

INTERNATIONAL TAX: Czech EU Presidency aims for 15% corporate tax deal by end of October.

As published on euractiv.com, Monday 18 July, 2022.

Czech EU Presidency will push for an EU-wide agreement on a 15% corporate tax, and Finance Minister Zbyněk Stanjura wants to have the deal by the end of October.

Fair taxation of large multinational companies was agreed upon last year at the Organisation for Economic Co-operation and Development (OECD). Based on this agreement, the European Commission presented a proposal which should implement the OECD reform at the EU level.

“We are now looking for a consensus within the European Union during our presidency, and we aim to find that consensus by the end of October,” Stanjura told Czech Television.

According to the Commission’s proposal, the tax would be imposed on companies with annual revenue exceeding €750 million.

While the European Parliament supports the Commission’s proposal, member states have not achieved the necessary consensus yet. In June’s EU finance ministers’ meeting, the proposal was blocked by Hungary, who argued that the EU’s minimum tax could damage the national economy and put jobs in danger.

Hungary currently imposes a 9% corporate tax, among the lowest in the EU. In order to pass tax reform in the EU, unanimity is needed. The proposal was previously blocked by Poland, too, but Warsaw dropped the veto during the negotiations led by the French EU Presidency in the first half of 2022.

In Czechia, there is political consensus on the need for a minimum corporate tax. The previous government, led by former Prime Minister Andrej Babiš, wanted to implement a national corporate tax but did not manage to do so. The country is thus waiting for the EU-wide solution.