PARIS — The EU is working on alternative ways to implement a global corporate tax rate of 15% despite opposition from Hungary, French Finance Minister Bruno Le Maire told reporters on Thursday.
“Minimum taxation will be implemented in the coming months without or with Hungary,” Le Maire told a group of journalists in Paris. He is working with the European Commissioner for the Economy Paolo Gentiloni “on alternative solutions which would allow countries which wish to do so to adopt a European text … without Hungary”, he added.
Le Maire’s comments echo a similar statement made by a German tax official earlier this week.
Paris and Brussels are considering the so-called “enhanced cooperation“, which would allow member countries in favor of the measure to move forward without having to reach the unanimity normally required for budgetary policy texts, said an official from the French Ministry of the Economy.
For this procedure to work, a minimum of nine countries must agree on the legal text. Beyond that, countries can decide to abandon the legislative initiative if they wish.
The minimum taxation directive was one of the main priorities of the French rotating presidency of the Council of the EU. Paris had put it on the ministers’ agenda since its first meeting in January, but failed to find a consensus as Hungary vetoed the text at the very last Council meeting under the presidency of Paris at the beginning of the month.
“I will never give up on this file,” said Le Maire. “Everyone knows” that Budapest’s opposition “has absolutely nothing to do” with the merits of the proposal, he noted. “Europe should [and] can no longer be held hostage [to] the ill will of some members.
The directive is one of two pillars of global reform that the Organization for Economic Co-operation and Development is trying to push forward after reaching an agreement last year with member states. It aims to prevent a race to the bottom in international corporate taxation and to ensure that the world’s biggest companies, including digital giants, pay taxes on their global profits.
Enhanced cooperation has a checkered history. A group of countries tried to use the procedure for the better part of a decade to agree on a common tax on financial transactions – with limited success.