PARIS – A global corporate tax deal is expected to be concluded before the end of the month, senior EU officials told CNBC on Wednesday.
Global governments have been embroiled in difficult negotiations to get a handful of nations to comply with an international corporate tax agreement. The G-7 and G-20 countries backed a deal earlier this summer that, if implemented, would force multinationals to pay taxes where they operate – not just where they operate. their head office – and would impose a minimum tax rate of 15%.
Some countries, including Hungary and Ireland, where corporate tax is below 15%, had expressed doubts about the deal. However, discussions led by the Organization for Economic Co-operation and Development appear to be bearing fruit.
Bruno Le Maire, France’s finance minister, told CNBC on Wednesday that “we are one millimeter away from a global agreement on a new international tax system for the 21st century”.
“I am fully determined to pave the way for consensus,” he said in Paris.
“The key point is that an agreement be adopted, by the end of this month at the latest, on the new international tax system.” He later added: “We could either next week at the Washington meetings or at the G-20 meeting in Rome at the end of October, sign the final deal under the international tax system.”
Also speaking in Paris on Wednesday, Valdis Dombrovskis, Vice-President of the European Commission responsible for trade, said: “We hope that the OECD agreement can be finalized in October. We are also working with EU member states to make sure everyone agrees on the tax treaty. “
“And we are also ready on our side to present legislative proposals to ensure the uniform implementation of this agreement across the EU.”
Luxembourg Finance Minister Pierre Gramegna also told CNBC on Tuesday: “We are very close to [a] compromise, in a few days, which will involve all countries. “
Ireland has signaled in the past 48 hours that recent changes to the deal are welcome. Leo Varadkar, the country’s deputy prime minister, said the new text “addresses many, if not all of the concerns” of his country, the Financial Times reported.
Meanwhile, Irish Environment Minister Eamon Ryan said he was hopeful and confident that Ireland would be part of the solution in this context. Paschal Donohoe, the country’s finance minister, told Luxembourg he would discuss the revised tax deal at a cabinet meeting on Thursday and express his opinion afterwards.
Despite comments from Ireland, Estonia and Hungary are among the group of countries that have yet to approve the deal.
Speaking to CNBC on Wednesday, Hungarian Foreign Minister Péter Szijjártó said his country’s corporate tax rate of 9% is a “huge advantage” and tax competition is not harmful.
He also said 15% is “high”, but understands that there is “no room” for the movement of key negotiators. Therefore, Hungary has proposed an implementation period of 10 years and hopes that this will be accepted by its counterparts.