France eyes minimum tax deal in June

The EU will reach consensus on a minimum corporate tax rate in June because Poland, the last hold-out, will abandon its opposition, French Economy Minister Bruno Le Maire predicted Tuesday.

“Everyone knows the issues [and] I am convinced that these could be removed on the 17th of June,” Le Maire said, referring to the date of the next meeting of EU finance ministers — the last one chaired by the French presidency of the EU.

French hopes are bolstered by the Commission’s impending approval of the Polish recovery plan under the EU’s pandemic rescue fund, set for next week.

“I think it is feasible that we will be finalizing this work even in the next days or week,” said Commission Vice President Valdis Dombrovskis.

That green light will give Warsaw access to €36 billion in loans and grants if it proves it has complied with its reforms and investment commitments.

The Polish recovery plan has been in limbo for nearly a year due to a struggle with Brussels over the independence of the Polish judiciary. The two sides struck a deal on the conditions that Brussels had set to release the funding. Commission President Ursula von der Leyen is likely to travel to Warsaw next Thursday to formalize the agreement, one official said.

The expectation is that this approval would convince Poland to finally sign off on an EU directive on a 15 percent minimum corporate tax base, known as “Pillar 2” of a global tax deal brokered by the Organization for Economic Cooperation and Development. It comes after repeated attempts were frustrated by Poland’s veto even after other countries dropped their reserves.

Poland has maintained that the two tracks are separate, and that its chief concern is that “Pillar 1” — the other part of the OECD deal, a decision to reshuffle taxing rights on residual profits of the world’s largest multinationals — may still be a ways off. It has asked for legally binding the two pillars.

While that’s impossible, according to Le Maire, the French presidency is working on political language to ensure that the two pillars are linked.

“We’re trying to work on a binding linkage between the two pillars, which wouldn’t be a legally binding linkage, but a political linkage,” Le Maire said. “I think we’re not far from getting the right wording.”

Zosia Wanat contributed reporting.