09/09/22

INTERNATIONAL TAX: Germany ready to implement minimum corporate tax if no EU deal.

As published on financialpost.com, Friday 9 September, 2022.

Germany is ready to implement a minimum corporate tax through national laws if the European Union cannot reach an agreement, its finance minister said on Friday, as his French counterpart hinted at potentially doing the same.

Hungary has raised objections that have held up the EU’s adoption of a 15% minimum corporate tax, hampering a deal that would have turned a global plan into law across the bloc.

Germany and France have taken the lead in the EU on putting the minimum tax into place as soon as 2023.

“We strongly support a European approach. We try to convince all member states, especially one,” German Finance Minister Christian Lindner said ahead of a meeting of EU finance ministers in Prague, speaking alongside his French counterpart Bruno Le Maire.

“We made the decision to implement the minimum corporation taxation in Germany if there is not European understanding on this, and I think others will be open to a similar approach.”

France has said EU countries will find a way to adopt plans for a minimum corporate tax rate regardless of whether Hungary backs the reform.

Hungary has argued that approval of the plan could harm the European economy, which is hurting due to surging inflation and a building energy crisis as Russia reduces flows of gas and electricity prices soar as a result.

Le Maire said “justice” was needed in difficult economic times, which meant the fast implementation of the plan already years in the making. He said options on a national level would be open if cooperation was not possible.

“Now it is time to implement this decision, we should not talk,” Le Maire said. “We should decide and we should implement this mininum corporate tax no later than next year.”