Council reaches agreement on a minimum level of taxation for largest corporations

Internationally agreed rules on fair and effective taxation for multinational groups will be applied in the EU

Internationally agreed rules on fair and effective taxation for multinational groups will be applied in the EU

EU member states reached agreement in principle to implement at EU level the minimum taxation component, known as Pillar 2, of the OECD’s reform of international taxation. The ambassadors of EU member states decided to advise the Council to adopt the Pillar 2 directive, and a written procedure for the formal adoption will be launched.

Effective implementation of the directive will limit the race to the bottom in corporate tax rates. The profit of the large multinational and domestic groups or companies with a combined annual turnover of at least €750 million will be taxed at a minimum rate of 15%. The new rules will reduce the risk of tax base erosion and profit shifting and ensure that the largest multinational groups pay the agreed global minimum rate of corporate tax.

The directive has to be transposed into member states’ national law by the end of 2023. This will still result in the EU being a front-runner in applying the G20/OECD global agreement on Pillar 2.


On 8 October 2021, almost 140 countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) reached a landmark agreement on international tax reform, as well as on a detailed implementation plan.

The reform of international corporate tax rules consists of two pillars:

  • Pillar 1 covers the new system of allocating taxing rights over the largest multinationals to jurisdictions where profits are earned. The key element of this pillar will be a multilateral convention. Technical work on the details thereof is ongoing in the Inclusive Framework
  • Pillar 2 contains rules aimed at reducing the opportunities for base erosion and profit shifting, to ensure that the largest multinational groups of companies pay a minimum rate of corporate tax. This pillar is now enshrined legislatively in an EU directive which was adopted unanimously by all member states voting in favour

On 22 December 2021, the Commission therefore presented a proposal for a directive which aims to implement Pillar 2 in a way which is consistent and compatible with EU law.

More information ?

Source : European Council, 14 December 2022

Mots clés

Articles recommandés

Parliament signs up for new EU Body for Ethical Standards : a significant first step towards fostering a common culture of integrity and ethics

Deal on strengthening consumers’ right to repair

Provisional deal to further cut fluorinated gases emissions, in line with EU and global climate goals.