EU Parliament approves international agreement for global minimum corporate tax rate

On 19 May 2022, the members of the European Parliament (MEPs) approved a Commission proposal implementing the recent international agreement on a global minimum corporate tax rate of 15%.

The text approves the key elements of the Commission’s proposal, notably sticking to the proposed implementation timeline and an implementation deadline of 31 December 2022 with the intention of a swift application of the law.

MEPs did however make changes to the Commission's proposal. In particular they introduced a review clause which provides for the revision of the annual revenue threshold above which a multinational corporation would be subject to the minimum tax rate. They also want an assessment on the impact of the legislation on developing countries.

MEPs also seek to reduce certain exemptions proposed by the Commission, and to limit the possibility for abuse of the rules, notably by introducing a specific article containing rules to fight tax avoidance schemes.

Next steps:

The report, which constitutes Parliament’s opinion, is now passed to the Council, which must adopt a final text, by unanimity.

Source:

European Parliament, press release of 19 May 2022.