Sven Giegold

Cyprus announces veto on minimum effective corporate taxation: Europe must act now

June 3. The Economic and Monetary Affairs committee of the European Parliament has just held an exchange of views with Constantinos Petrides, Minister of Finance of the Republic of Cyprus. His governing party is a member of the European People’s Party (EPP). When I asked him about his country’s support for a minimum effective corporate tax rate in the EU, he replied that Cyprus would oppose an EU directive for a minimum effective corporate tax rate, which the Commission has announced based on a forthcoming agreement at OECD level. Cyprus is the only EU Member State which is not part of the OECD/G20 Inclusive Framework on BEPS. He was unable to answer my question about how Cyprus would vote on the deal on public country-by-country reporting.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group comments:

“It is an illusion to think that we can make significant progress in tax matters without exploring alternatives to the unanimity principle in Council. The Cypriot Minister of Finance has just announced his country’s veto on introducing a minimum effective corporate tax rate in the EU through a directive. We have to stop European tax havens like Ireland and Cyprus from sabotaging much needed progress in tax matters. Instead of snuggling with inner-European tax havens, European countries should join the US in developing a progressive tax agenda. Together with our friends across the Atlantic, we should stand up for a 21% effective corporate tax rate. We are not helpless in the face of European tax havens. If needed, there is a way to implement minimum corporate taxation with a European coalition of the willing, in full compliance with EU law. Minimum source taxes can be applied to foreign as well as local subsidiaries. Countries which are harmed by corporate tax avoidance can no longer afford to remain passive. I call on the European Commission to explore all available options for the introduction of a minimum effective corporate tax rate in Europe.”

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Category: Economy & Finance

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