The Maastricht Diplomat

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[Reuters] An uncontrollable algorithmic blockage

Poland holds its blockage to the internationally agreed minimum effective tax rate of 15% for large multinational companies. Keeping a calm voice seems hard for the Member States’ leaders in front of Poland’s negative to give in. The third committee session of the day is launched and no compromise seems to be at sight yet. The chairs patiently watch the show.


France emphasizes the need for a tax that makes large companies such as Google and Facebook pay a fair share of their profits through a 15% tax rate, as it was agreed by the OECD as a part of the internationally signed tax deal. Ms Magdalena Rzeczkowska holds its veto and argues that an additional pillar to the EU corporate tax directive, based on allocating taxes to the places where the multinationals’ revenue is generated instead of where their HQs are, is the key condition for Poland to give in.


Unconvinced, Greece shows parallel gratitude for the move by Malta, Sweden and Estonia to compromise on this aspect, while Denmark and Spain emphasize the need for digitalisation to boost entrepreneurship and the fact that competition will not be limited by such a corporate tax.


Smartly, Denmark aims to conclude the ping-pong style discussion and adjourn it instead the for the next session since no compromise seemed to be at reach in the room. Silence knocks at the door and we then take the chance to interview the Maltese and Danish Heads of State.


Robert Abela, Malta’s Prime Minister

Mr. Abela, what has been the most challenging part of today’s summit?

Well, the hardest has been and is to combine both Maltese needs and EU’s goals. After all, the interests of the Maltese citizens shall be represented in the summit but it’s also in the interest of Malta to be part of the EU and the global context, for which despite being difficult both shall be combined. Malta enjoys a unique position in the EU that shall be considered and respected.


Any surprising coalitions during the meeting?

We are happy to share the view with Germany and Greece, on certain aspects. Greece shares a similar economic setting that allows compromise to be reached. On the other hand, there are some aspects on the taxation field upon which Poland and Malta partly agree. Yet, we expect and hope wider compromise is reached with Poland regarding the EU corporate tax directive.


What is your priority outcome from the summit?

Consensus.


Mette Frederiksen, Denmark’s Prime Minister

What has been the most challenging part of today’s summit?

The fact that Denmark is really advanced in terms of digitalisation and regulation of companies makes it hard to reach consensus among Heads of States. And this is already bearing in mind that the EU narrows down and simplifies worldwide discrepancies on the sphere of multinational companies’ regulation.


What is your priority outcome from the summit?

As Denmark, boosting EU-wide digitalisation and further cooperation between states. As a Delegate, improving my debating and negotiating skills in such constructive and inspiring environments.


The interviews are subject to revision in case of disagreement. Kind thanks to the delegates interviewed and congratulations for their great performance during the conference. Now, the question is whether the Polish veto is about taxation or goes beyond to hinder the final outcome of the Council’s summit.


- Gazzy Colon, Reuters Europe Editor

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