Estonia doesn’t support a global minimum corporate tax in its current form

Estonia doesn’t support a global minimum corporate tax in its current form as, according to the finance minister, it would go further than initially agreed.

The Estonian finance minister, Keit Pentus-Rosimannus (Reform Party) told the Estonian Public Broadcasting that the current suggestion for the European Union directive on the subject doesn’t let the EU member states to decide for themselves whether they apply the minimum tax on companies. “An agreement at the OECD level did leave this option, so the European Commission has gone farther than that,” the minister said.

Politico reported on 18 January that three EU countries – Estonia, Hungary and Poland – have thrown the bloc’s efforts to introduce a global minimum corporate tax of 15 per cent into disarray.

The Estonian finance minister Keit Pentus-Rosimannus. Picture by Pentus-Rosimannus’s official Facebook page.

The finance ministers of these countries also demanded the initiative be contingent on the rollout of a global levy on the world’s 100 biggest companies, due to be rubber-stamped in June and introduced in 2023. Their concern is that the US president, Joe Biden, will fail to find the Congressional support he needs to implement the same rules, leaving Europe at an economic disadvantage, Politico said.

The tax rate is part of a global agreement that the Organisation for Economic Cooperation and Development – known as the OECD – brokered last autumn to obliterate tax havens and ensure that the world’s multinational firms – including tech giants – pay their share in tax.

According to the Estonian understanding, the OECD agreement doesn’t mean Estonia need to apply the global tax domestically. The European Union directive proposal, however, needs to guarantee that all member states apply the tax in the same way and don’t contradict the EU’s basic principles, the Estonian Public Broadcasting reported.

For the EU directive to come into force, all member states have to support it.

The cover image is illustrative. Picture by Shutterstock.

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