The OECD agreement would keep Brussels from having to push through its own proposal
Europe’s low-tax countries have responded positively to the Biden administration’s plan to radically reform global corporate tax, though they will lose – but signal that Washington can expect one. War on many details.
The proposal, which first appeared last week, seeks to break the stalemate in lengthy global negotiations hosted by the club of rich countries OECD. It would give countries the right to raise corporate taxes from U.S. tech giants and other major multinationals, while also setting minimum corporate taxes globally.
That would be a blow to Ireland, the Netherlands, Luxembourg, Malta and Cyprus, all popular bases for the world’s largest companies, which have fiercely defended their right to tax their business at a level. they choose.
Even so, Dublin said it “supports an agreement. . . that could bring stability to the international tax framework ”, while Hans Vijlbrief, the Dutch State Finance Minister, said the Biden plan was a” big step towards finding solutions. and develop effective rules ”.
“There will be very few countries criticizing the plans to eradicate tax avoidance. But only when you start the conversation do some countries go the other way, ”said Tove Maria Ryding, policy director for the European Development and Debt Network in Brussels.
The ease with which the world’s largest multinationals can channel their profits through these jurisdictions to reduce their overall tax burden has long been the cause of complaints among Major economies in Europe on the loss of revenue in their home countries.
Any new tax across the EU, however, requires the consensus of all 27 member states, giving veto powers to governments that are drastically defending their taxation rights. As a result, the EU’s finance ministries have struggled for years to unify bloc policies to thoroughly tackle multinational tax avoidance.