Debate: National vetoes to undermine the global tax deal
Date: THURSDAY, 23 JUNE 2022
Speaker: Paolo Gentiloni
Language: EN

Establishing a global minimum taxation should be a goal that unites us. We need to ensure fairness and equity both for our economies and our societies. For this reason, last October, we welcomed the International Global Agreement on both Pillar One and Pillar Two. We all agreed to this international deal – all the European Member States unanimously, without any exception. We have then worked tirelessly to present a proposal for a directive within a few weeks. Six months ago, we passed on the torch to the French Presidency – and let me pay tribute to the enormous work that the French Presidency and Minister Le Maire did with great enthusiasm and determination. This allowed to overcome a few technical hurdles and to reassure progressively all Member States on their fruition.  Meanwhile, you, the European Parliament gave its strong political support to the Implementing Directive with a very strong vote. And yet one single Member State raised last—minute opposition prior to the last ECOFIN, while it had endorsed the agreement at international level, but also the implementing directive in the previous ECOFIN meetings.  Let me quickly address the arguments that were used. First, the current context of the war and the economic situation. Well, the current context of the war mentioned by Hungary has affected us all, of course! This is a reality which has increased the need for adopting initiatives that are revenue generators for the EU economy and enablers to protect European citizens against the effects of Putin’s senseless war. Indeed, Hungary had endorsed in previous Council meetings the directive, including the last one in May with the war going on since three months of the time. Minimum taxation benefits all Member States. A global minimum tax of 15% is estimated to generate around USD 150 billion in additional tax revenues annually. Why give it up? The second argument was the ongoing work on Pillar One. I repeat that both pillars are important to me, to the Commission, to the Council and to Parliament. I repeat it tirelessly: both pillars have to be implemented. We need a global minimal taxation, and we need to ensure that the giants, especially the giants of the digital economy, pay their share of taxes where their profits are made, and not only where their headquarters are established. We will continue, as I have formalised, also with the availability to make a statement annexed to the minutes of the ECOFIN meeting, to monitor closely the ongoing negotiations in the OECD on the Multilateral Convention on Pillar One. We will submit a report on progress on Pillar One to the Council by June 2023 and reassess the situation accordingly with a view to submitting a legislative proposal if appropriate. Our citizens’ expectations are very high and we cannot fail to deliver.  So the responsibility rests with the last opposing Member State. Let me be crystal clear. Of course, we encourage Hungary to reconsider its position, but as the French Minister said, together with Parliament and with the Council, in any case we will not give up!