French EU presidency looks for swift progress on minimum tax for multinationals

(BRUSSELS) - The new French EU Presidency took an early opportunity Tuesday to progress work on a proposed Council directive which will ensure a global minimum level of taxation for multinational groups.

At their Council meeting, finance ministers confirmed the priority nature of this file and the need to urgently transpose the agreed rules of international corporate taxation as soon as possible.

The aim of the directive is to transpose the global OECD/G20 Inclusive Framework (IF) on base erosion and profit shifting (BEPS) on a two-pillar reform of the rules on international corporate taxation into EU law.

This international agreement, which brings together 137 countries and jurisdictions, constitutes a major milestone towards an effective and fair system of profit taxation. The directive concerns the so-called 'Pillar Two' of the reform, which precedes 'Pillar One', on which technical work is still ongoing in the OECD BEPS IF.

Also at the meeting, the French presidency presented its priorities for economic and financial affairs for the first half of 2022.

Ministers discussed the state of play regarding the implementation of the Recovery and Resilience Facility (RRF).

At this stage, Commission assessments of Recovery and Resilience Plans (RRPs) for five member states are still pending. One of these five member states still needs to submit its RRP. The Council has acted swiftly on the Commission proposals and adopted Council implementing decisions approving assessments of 22 plans within the tight timeframe set in the regulation. The Commission is in discussions with Bulgaria, Hungary, Poland and Sweden on the assessment of their RRPs.

So far, 18 member states have received pre-financing (13% of the amounts requested) for a total of €54.2 billion. To fund the plans, the Commission has already borrowed €71 billion through long-term instruments and €28 billion through short-term instruments on the financial markets.

The RRF is a temporary recovery instrument that allows the Commission to issue debt on behalf of the Union to help Member States implement reforms and investments. It makes €723.8 billion (in current prices) available in loans (€385.8 billion) and grants (€338 billion).

In their interventions, many ministers stressed the importance of a swift disbursement to the member states. The Council expects the bulk of the implementation of the RRF to take place in 2022.