EU member states agree on minimum level of taxation for multinationals

The European Union has reached an agreement to implement the minimum taxation component of the Organization for Economic Cooperation and Development's (OECD) international tax reform. The decision was reached after months of negotiations between member states and Hungary, which finally dropped its veto on Monday night.

The implementation of the directive should limit the "race to the bottom" in corporate tax rates, From the end of 2023, large multinationals with a combined annual turnover of at least €750 million will be taxed at a minimum rate of 15%, and not just in the country of their headquarters.

The new rules are intended to reduce the risk of tax base erosion and profit shifting, ensuring that the largest multinational groups pay the agreed global minimum rate of corporate tax.

For Belgium, the next step will be the transposition into Belgian law so that this minimum tax can come into force in 2024. At Finance minister Vincent Van Peteghem's request, the federal public finance department has already prepared the implementation of this transposition.

"Finally, we had already taken major steps and the FPS Finance has been ready for some time to transpose the rules into Belgian law," Van Peteghem reacted on Tuesday morning. "I am therefore very pleased with this important step towards greater fiscal justice."

^{© BELGA PHOTO JULIEN WARNAND}