Minimum tax for multinationals, the European directive is not there and is not visible, and then the answer becomes national. Hungary continues to put its foot down, it does not allow to reach the unanimity required in the Council to proceed with the imposition of a rate of 15% for multinationals that make at least 750 million euros of combined financial income. Italy, France, Germany, the Netherlands and Spain are tired of waiting, and decide to force their hand. They make “the pact of the five”, and announce that they are ready to proceed alone, but in a “coordinated” way, to produce the tax revolution which, in the light of the Russian-Ukrainian war, becomes even more postponable.
The Russian aggression of Ukraine is costing national governments, and not a little. Macro-financial assistance to Zelensky and his people, military aid, measures to stem the expensive energy resulting from the conflict. What began as a measure of fiscal equity now takes on another meaning. “Even large companies must contribute to the costs of the war,” explains Nadia Calviño, Spain’s finance minister. She introduces herself with the counterparts Sigried Kraag (Netherlands), Daniele Franco (Italy), Bruno Le Maire (France), and Christian Lindner (Germany). A brief statement to the press that the five have been keen to organize in a moment of pause in the work of the Eurogroup and Ecofin gathered in Prague.
The small group of the willing wanted to show determination and unity of purpose. Starting with the holder of the tricolor Treasury. “An agreement was found under the Italian presidency of the G20,” recalls Franco. It was the end of October a year ago. A year later, the EU has not yet managed to put that agreement into practice. “It is extremely important that at this moment also the multinationals contribute to the revenue”. Therefore, clarifies the Italian minister, in the impossibility of making progress as a European Union, it is essential to “proceed in another way”.
The possibility of using enhanced cooperation is mentioned, a procedure which allows a minimum of nine Member States to introduce integration in any matter, including taxation. Considering that only Hungary is blocking the work on the minimum taxation of multinationals, Italy, France, Germany, the Netherlands and Spain trust that the minimum quorum is not a difficulty. However, the European Commission is holding back, and this is a problem since proceeding with enhanced cooperation requires the Community executive to propose it to the Council. “For us, the preferable solution is the European one”, at 27, replies Valdis Dombrovskis, executive vice president responsible for an Economy at the service of people. The Czech Republic, with the rotating presidency of the EU Council, is also holding back. “The objective of the presidency is to reach a compromise, and we are working towards that”, the response of the Minister of Finance of Prague, Zbynek Stanjura, to the coup d’état of the five.
However, Italy, France, Germany, the Netherlands and Spain do not seem at all intimidated by the resistance of the partners. On the contrary, they appear determined and combative, due to delays that have become unbearable. “After five years of work we want to move forward and introduce this tax from 2023”, an annoyed Bruno Le Maire cuts short. “We can not wait anymore”. And if the Commission does not propose enhanced cooperation on the matter, the five countries are ready to introduce it at a national, but coordinated, level. Provided that the vote of 25 September does not redesign the alliance and annexed program.