The Socialists and Democrats welcome last night's endorsement at the IMF annual meeting by the G20 finance ministers of a global effective minimum tax rate of 15% reached within the OECD/G20 Inclusive Framework on BEPS*.

For many years, the S&Ds have spearheaded the fight in the European Parliament for a minimum effective tax rate and tax justice. Under the leadership of the S&D Group, the European Parliament for the first time backed our long-standing demand for a minimum effective corporate tax rate in a report adopted in March this year. The S&Ds will now continue their campaign to push for an ambitious implementation in the EU and renewed called for own resources as the next milestone for delivering on citizens’ calls for tax justice.

Biljana Borzan, S&D MEP and vice-president for an economy that works for all, said:

“The agreement on a global corporate minimum tax rate is historic. It can be a game-changer to start fixing our unfair tax system and we must build on that momentum.

“Today, countries can aggressively compete with each other for the lowest tax rate to induce multinationals to shop around, while SMEs are unfairly taxed at a higher rate. This ‘beggar thy neighbour’ attitude costs the EU €160-€190 billion – every year. Money we need to finance a speedy, fair and green recovery from the pandemic.

“The global minimum effective tax rate will empower countries to implement fairer taxation without the fear of being undercut by others.”

 Jonás Fernández, S&D MEP and spokesperson for economic and monetary affairs, said:

“A 15% minimum tax rate is expected to yield €48 billion in additional, much needed tax revenues. This is also about regaining control in a globalised economy, where big multinationals, lured by tax havens, get away with bending the rules at the expense of the many. It is about protecting trust in our democracies and fairness for the hard-working people and the neighbourhood shops who pay their taxes.

“Our fight for tax justice does not stop here. We must urgently broaden the EU’s black haven’s list and step up our fight against money-laundering. Now that the OECD deal foresees that no Digital Service Tax may come into force before the end of 2023, and the European Parliament has adopted a file against harmful tax practices, we call on the Commission to look into alternatives to deliver on the commitment of an own resource financed by a digital levy.”

Aurore Lalucq, S&D MEP and spokesperson on tax matters, said:

“We call on the EU Commission and EU governments to rapidly and ambitiously implement the corporate minimum effective tax rate. We would have liked to see a higher rate than 15%, but it is a huge improvement from the zero per cent we currently have. We will closely monitor the implementation to ensure the deal remains ambitious once transposed into EU law.

“Following the revelations of the Pandora Papers last week, we are stepping up our investigative work in the tax matters committee of the European Parliament. We will continue to come up with, and push for, innovative solutions to stop rich individuals and big corporations from abusing loopholes to dodge taxes.”

Note to the editor:

*BEPS stands for base erosion and profit shifting, which refers to tax-planning strategies used by multinationals that exploit gaps and mismatches in national tax rules to avoid paying taxes. Working together within the OECD/G20 Inclusive Framework on BEPS, 139 countries and jurisdictions are cooperating to improve tax rules.

Visit our Tax Justice website to find out more about our tireless campaign to fix the broken tax system.