EU member states, on December 12, reached agreement to implement a minimum tax rate for large businesses at the EU-level.
The measure is aimed at limiting the race to the bottom in corporate tax rates. The profit of the large multinational and domestic groups or companies with a combined annual turnover of at least EUR 750 million will be taxed at a minimum corporate tax rate of 15 percent.
The new rules will reduce the risk of tax base erosion and profit shifting and ensure that the largest multinational groups pay the agreed global minimum rate of corporate tax.
The ambassadors of EU member states have advised the Council to adopt the measure. A written procedure for the formal adoption will be launched.
An EU directive in this regard is likely to be transposed into member states’ national law by the end of 2023.
Zbyněk Stanjura, Minister for Finance of Czechia, said: “I am very pleased to announce that we agreed to adopt the directive on the Pillar 2 proposal today. Our message is clear: The largest groups of corporations, multinational or domestic, will need to pay a corporate tax that cannot be lower than 15%, globally.”