Companies with a turnover of more than 750 million euros per year must pay at least 15 percent profit tax from 2023, the European Commission (EC) said on Wednesday. The EC also wants a tougher approach on ‘PO box companies’. All this should ensure a fairer tax system in Europe, which puts an end to tax avoidance and evasion.
In October, 137 countries reached an OECD agreement on a major reform of the international tax system. They agreed that large multinationals will pay at least 15 percent tax on their profits from 2023, regardless of the country where they are located.
The proposal presented by the EU Commission states, among other things, how the tax should be calculated and applied in the European Union. Vice-President Valdis Dombrovskis of the committee wants to immediately transpose the rules into EU law, but Hungary, Estonia and Poland are currently resisting this.
Source: European Commission
Note from the editors: In some news bulletins, the ‘15% minimum tax’ is described as ‘15% additional VAT’. This is not correct. The 15% is a minimum rate for income tax purposes, to be levied on the profit of large companies. VAT is levied on turnover, and the VAT rates are not different for small or large companies.
