Poland willing to drop opposition to minimum corporate tax

16 Jun 2022

Poland is due to eliminate its opposition to an EU directive to implement the global minimum corporate tax.

Warsaw is set to show its readiness to agree to the directive at an upcoming meeting with European Union ambassadors. Should no other member countries make any additional objections, an agreement could be reached at a ministerial meeting in Luxembourg on Friday.

Poland’s move to scrap its opposition to this move would be a significant step forward for the EU, following 2021’s agreement which saw 136 nations supporting a 15% minimum effective corporate tax rate on large businesses, dubbed Pillar Two, Financial Times reports.

Pillar One, of the same OECD agreement, would mean the 100 largest multinational firms in the world have to declare profits and pay more tax within countries where they operate. However, global negotiations have delayed the measure.

As it stands, the EU is translating the Pillar Two deal into domestic law through a directive, which must be agreed unanimously. According to EU officials, Poland has been dragging its heels partly due to the commission’s previous refusal to grant approval for its €36 billion recovery fund.

Yet, the deal on Poland’s recovery plan between European Commission president Ursula von der Leyen and Poland’s prime minister Mateusz Morawiecki removed that hurdle. Indeed, there was now a “positive signal that they are able to jump on board”, according to an EU diplomat in regard to Poland’s stance.

The Polish finance ministry stated: “The passing of the directive is an ongoing process and Poland hopes for it to be successfully completed shortly. Our constant approach aimed at retaining the link between the pillars at the EU level is strictly a matter of the international tax reform. It is not affected by any other EU issues and we are not in any way undermining the OECD project.”