A global minimum corporate tax rate and the reallocation of taxing rights between jurisdictions must be implemented in due time to provide a fairer and more stable global corporate tax system, Paolo Gentiloni, European Commissioner for Economy, has said.
Gentiloni was speaking at the first EU Tax Symposium, held in Brussels on November 28, 2022. At the tax symposium, European and international Finance Ministers, high-level policy makers, academics, and civil society came together to discuss the future of corporate taxation.
Gentiloni said that last year’s historic global tax reform, agreed by 136 countries, will bring major improvements to the international tax landscape, making it fairer and better adapted to the modern economy.
“To reap the full benefits of this agreement, we must now ensure the implementation of both Pillars of that reform – in Europe and worldwide,” he told the audience. “We remain fully committed to this crucial reform: step by step and piece by piece it must become a reality. As you know, both Pillars are equally important to us.”
Gentiloni said that a swift implementation of the tax package is feasible.
“The Pillar Two Global Anti-Base Erosion (GloBE) Model Rules pave the way for a consistent implementation at global level. The new calendar for signing the Multilateral Convention on Pillar One is set for the first half of 2023,” he said.
Gentiloni said that next year, the EU Commission will propose a single set of tax rules for doing business in Europe.
“We call it BEFIT, which stands for Business in Europe: Framework for income Taxation,” he added.
“BEFIT will take inspiration from the two-pillar reform at global level, but go further, to provide a new corporate tax system fit for our closely integrated single market. It will replace national corporate tax systems for the companies in scope, thus reducing compliance costs and barriers to cross-border investment,” he said.
He added: “BEFIT will have the key features of a simplified common tax base and the allocation of taxable profits between Member States. It will be another important step in the fight against harmful tax competition.”