The European Parliament Committee on Economic and Monetary Affairs and Subcommittee on Tax Matters has issued a release on a meeting held on 26 September 2022. The meeting included a Q&A session with EU Tax Commissioner Paolo Gentiloni, with several members of parliament (MEPs) questioning the Commissioner on the implementation of the Pillar 2 global minimum tax. In response, Commissioner Gentiloni generally reiterated the continued commitment to the implementation of Pillar 2 and that he will continue to work with the Czech presidency to overcome the current "unjustified" veto by Hungary by the end of the presidency. Commissioner Gentiloni also addressed a question on the 15% alternative minimum tax (AMT) introduced by the U.S. under the Inflation Reduction Act. Regarding the AMT in relation to Pillar 2, the Commissioner stated that it is a positive and interesting decision in the domain of corporate taxation, but it is not a substitute for the implementation of Pillar 2.

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MEPs discuss tax policy with Commissioner Gentiloni

MEPs discussed tax policy with Commissioner Gentiloni on Monday, focusing on a windfall profits tax, and the implementation of the global minimum corporate tax rate, among other topics.

The meeting, held by the economic and monetary affairs committee, allowed MEPs to hold an in depth discussion with the Commissioner responsible for taxation for the first time since Russia's illegal aggression and the ensuing energy price hikes and resulting inflation.

Commissioner Gentiloni explained how his services are doing their part to lay on the pressure on Russia and also address the high energy prices, notably through the presentation of a proposal for a temporary solidarity contribution based on surplus profits made by the fossil-fuel sector.

MEPs sought more details on the Commission's proposal for this tax on windfall profits, notably on the definition of 'excess profit', on why the scope was so narrow, and on how non-EU headquarterd companies would also be made to contribute.

With inequalities soaring and inflation hitting low-end families particularly hard, MEPs also asked if the Commission should not launch a debate on the necessity of a wealth tax.

MEPs were also particularly interested in the next steps for implementing the agreement reached in December at OECD level for a global minimum rate of corporate taxation. Currently blocked in the EU due to Hungary, MEPs wanted to know what next steps were being envisaged. MEPs also asked whether certain rule changes, such as the US's inflation reduction act, to fight the rapid inflation would pose a problem to the implementation of the OECD agreement or not.

You can watch the debate again here (scroll time bar to 17:02)