Poland ready to drop objection to minimum global corporate tax

Step by Warsaw would remove big stumbling block to implementing OECD tax deal in EU

European Commission president Ursula von der Leyen speaks with Polish president Andrzej Duda (R) and Polish prime minister Mateusz Morawiecki. Photograph:  Wojtek Radwanski/AFP
European Commission president Ursula von der Leyen speaks with Polish president Andrzej Duda (R) and Polish prime minister Mateusz Morawiecki. Photograph: Wojtek Radwanski/AFP

Poland is set to remove its opposition to a directive the EU wants to use to implement the global minimum corporate tax, raising hopes that the measure will become law across the 27 member states.

Warsaw is expected to signal its willingness to agree to the measure at a meeting of EU ambassadors in Brussels this morning, according to five people familiar with the discussions.

If no other member states raise last-minute objections, the move would clear the way for a deal among the 27 capitals when finance ministers meet in Luxembourg on Friday.

A decision by Poland to drop its veto would represent a leap forward for the EU, following last year’s international agreement in which 136 countries backed the introduction of a new 15 per cent minimum effective corporate tax rate on large businesses, known as Pillar Two.

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Pillar One of the same OECD agreement would force the world’s 100 biggest multinationals to declare profits and pay more tax in the countries where they do business, but this measure has become bogged down in international negotiations and EU implementation plans have been delayed.

The EU is working to translate the deal on Pillar Two into domestic law via a directive, which will require unanimous consent. EU officials have claimed Poland previously dragged its feet in part because of the commission’s earlier refusal to approve its €36bn recovery fund bid.

However, this month’s deal on the Polish recovery plan between commission president Ursula von der Leyen and Polish prime minister Mateusz Morawiecki removed that obstacle.

Diplomats said they would be carefully watching the position of Hungary at this morning’s meeting of ambassadors in Brussels. Budapest has yet to seal a deal on its own pitch for the recovery plan because of a stand-off over rule of law standards.

The Polish finance ministry could not immediately be contacted for comment.

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