On April 5, 2022, Poland vetoed a compromise proposal for an EU directive aimed at implementing the internationally agreed 15% minimum effective tax rate for large multinationals.
Poland stood alone in its opposition to the compromise deal. Although Estonia, Malta, and Sweden were initially resistant, they eventually joined the majority after further compromises were made in March.
The global minimum effective tax rate of 15% is a key component of an international tax agreement reached in October 2021 by over 130 countries. This agreement aims to address international tax competition and corporate tax evasion.
To enforce the global minimum tax rate uniformly across the EU, the European Commission proposed a directive. In response to concerns from some member states, notably Malta and Estonia, the French EU Presidency offered a compromise.
The compromise proposed that the minimum effective tax rate would be optional for six years for countries hosting fewer than 12 multinational companies qualifying under the minimum tax regime.
French Finance Minister Bruno Le Maire, who chaired the meeting, allowed member state representatives to express support for the compromise before Polish State Secretary Magdalena Rzeczkowska vetoed the agreement. Poland justified the veto by arguing that the directive should be combined with another aspect of the international tax deal.
The additional pillar of the international tax deal would allocate some taxes of highly profitable large businesses, like Apple or Facebook, to countries where their revenue is generated rather than where their headquarters are located. Rzeczkowska argued that both pillars should be treated as a package.
Le Maire proposed a common declaration to link the two pillars politically but failed to convince the Polish government. He openly criticized Poland’s position, expressing doubt about their arguments.
In December 2021, Polish Justice Minister Zbigniew Ziobro reacted strongly to the European Commission’s decision to withhold EU funds from Poland due to concerns over the Rule of Law and judicial independence. Ziobro labeled this as “blackmail” and suggested that Poland might use its veto power in EU matters requiring unanimity.
Le Maire announced plans to revisit the subject in future EU finance minister meetings, indicating that the issue is far from resolved.
