On Thursday, the European Commission took Poland, Spain, Portugal and Cyprus to the Court of Justice of the EU over their failure to implement the second pillar of global tax reform. The idea is to introduce a minimum income tax of 15%.
The EC justified its decision to file a complaint by stating that all four countries had not implemented into national law the directive on ensuring a global minimum level of taxation of international groups of enterprises and large domestic groups. The directive entered into force on January 1.
The second pillar is intended to limit the downward slope of corporate income tax rates. According to the directive, the effective tax rate for large companies with a total annual turnover of at least EUR 750 million will have to be no less than 15%.
EC complaint
In its application, the EC admitted that the authorities of four countries, including Poland, “are making significant efforts to adopt national regulations implementing the second pillar.” They have not notified any transposition measures so far.
Tax reform was supported by over 140 countries around the world.
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