European MEPs approve proposed directive to implement OECD’s Pillar Two global tax rule

European MEPs have approved a directive to implement the OECD’s Pillar Two global tax rule, setting a minimum corporate tax rate of 15%. The directive, adopted by the European Parliament, aims for swift implementation by December 31, 2022, with only minor changes made to the proposal. The text now moves to the Council for unanimous adoption, with Poland being the only member state in opposition.

European MEPs have approved the proposed directive to implement the OECD’s so-called Pillar Two of the global tax rules, which sets a minimum corporate tax rate of 15%. The OECD’s Two-Pillar approach was approved by 136 jurisdictions in October 2021.

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The proposed directive, published in December 2021 was adopted by the European Parliament by 503 votes in favour, 46 votes against and 48 abstentions.

MEPs have approved the key elements of the proposed directive, including the implementation deadline of 31 December 2022 to ensure a swift application of the law. They made limited changes to the proposal.

Parliament’s text will now be passed on to the EU Council, which must adopt a final text by unanimity. Back at the Council, Poland is the only EU member state which stands opposed to the proposed directive.