France sticks to ambitious timetable for global minimum tax

Following yesterday’s (18 January) ECOFIN finance ministers meeting, French Minister for Economic Affairs, Finance and Recover Bruno le Maire briefed journalists on France’s ambitious timetable for the introduction of the global minimum tax. 

The European Commission tabled its proposal for a directive at the end of December. The French Presidency is pressing for rapid progress, with a view to having the Directive adopted and in force by the start of January 2023. 

All EU members have agreed to the proposal, including low corporate tax countries like Ireland, but some are concerned as the measure passes into law, despite already agreeing to it at OECD level. Some states are also concerned that progress on what is called ‘Pillar One’ - moving to a tax on sales for large digital service providers - will not be agreed in tandem. Le Maire wants to see both pillars agreed, but the French presidency will be focused principally on Pillar 2, as it is the more advanced. 

Tax has remained a field where national treasuries jealously guard control of their powers. Those in favour of fair taxation have argued that this leads to a race to the bottom with different EU countries undercutting each other to attract business. Le Maire was keen to point out to the proposals detractors - Hungary, Poland and Estonia - that the proposal does not mean fiscal harmonisation across Europe. EU states would still maintain sovereignty on income, VAT and be free to set different rates with a minimum threshold of 15%.

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