On April 14 the Dutch Minister of Finance sent her report of the Eurogroup and Ecofin Council that took place on April 4-5, 2022 to the Dutch House of Representatives. Obviously several subjects were discussed during these 2 days of meetings. One of these being the proposal for a Council Directive on ensuring a global minimum level of taxation for multinational groups in the Union. With respect to the discussions that took place in this respect the report of the Dutch Minister of Finance states the following:

“Proposal for a Directive on a general minimum level of taxation for multinationals in the EU

The proposal for a directive on a general minimum tax level for multinationals in the European Union (EU) was discussed during the Ecofin Council (hereinafter referred to as: proposal for a Pillar 2 directive). This proposal for a directive was released on December 22, 2021 by the European Commission. The legal basis for this proposal for a directive is Art. 115 of the Treaty on the Functioning of the European Union. Decision-making on the proposal is unanimous (with consultation of the European Parliament). The proposal had already been put on the agenda for a general approach for the Ecofin Council of March 15. During this meeting (ITP: The meeting of April 5, 2022), it was once again impossible to come to an agreement on a general approach with regard to the proposal for a directive. It is not yet clear when the proposal will be put back on the agenda for decision-making.

The French Presidency has energetically set to, in line with the Inclusive Framework (IF), organized by the Organization for Economic Co-operation and Development (OECD), agreed implementation plan, work to arrive at a rapid adoption of the proposed directive. As the proposed directive is broadly similar to the model texts agreed upon by 137 countries within the IF, it was possible to make rapid progress in the Council working groups.

During the Ecofin Council almost all Member States, including the Netherlands, expressed their support for the proposed compromise. Due to the link between Pillar 2 and Pillar 1 (Pillar 1 regulates a different distribution of profits and tax rights between countries for the largest and most profitable multinationals) one Member State (ITP: Poland) could not agree. This Member State indicated that it wished to make the entry into force of Pillar 2 dependent on the entry into force of Pillar 1. Other Member States, including the Netherlands, still commit to rapid progress on Pillar 1 but do not support the conditional link between Pillar 1 and Pillar 2.

The Netherlands agrees with the substance of the proposal for a directive and with the proposed compromise. The Netherlands considers it important that an agreement is reached within the EU in the short term so that further progress can be made with the national implementation of the proposal.”

The report of the Dutch Minister of Finance can be downloaded here. (only available in Dutch)

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