Fair Taxation: Commission welcomes agreement on minimum taxation of multinationals

The Commission welcomes the unanimous agreement announced last night by the Czech Presidency of the EU Council on the Commission’s proposal for a Directive ensuring a minimum effective tax rate for large multinational groups. With this historic agreement, the EU’s pledge to be among the first to implement the OECD tax reform, comes closer to fruition. Once implemented, this agreement will bring fairness, transparency and stability to the international corporate tax framework.

The Council Directive, to be formally adopted by Council written procedure, includes a common set of rules on how to calculate the 15% effective minimum tax rate– so that this is properly and consistently applied across the EU. The minimum tax rate of 15% has been agreed at global level by 137 countries.

The rules will apply to multinational enterprise groups and large-scale domestic groups in the EU, with combined financial revenues of more than €750 million a year. They will apply to any large group, both domestic and international, with a parent company or a subsidiary situated in an EU Member State. If the minimum effective rate is not imposed by the country where the subsidiary company is based, there are provisions for the Member State of the parent company to apply a “top-up” tax. This Directive also ensures effective taxation in situations where the parent company is situated outside the EU in a low-tax country which does not apply equivalent rules.

Member States must implement the new rules by 31 December 2023.


Ensuring a global minimum level of taxation for Minimum corporate taxation is one of the two work streams of the global OECD agreement (Pillar 2) – the other is the partial re-allocation of taxing rights (known as Pillar 1). The latter will adapt the international rules on how the taxation of corporate profits of the largest and most profitable multinationals is shared amongst countries, to reflect the changing nature of business models and the ability of companies to do business without a physical presence.