EU Push For Global Minimum Tax Falters Again as Poland Blocks

(Bloomberg) -- The European Union stumbled again in its attempt to quickly implement a global deal for a minimum corporate tax at 15% as Poland continued to block progress. 

The Polish government is increasingly isolated in its opposition to an EU directive on the matter. That's after Sweden and Estonia dropped their opposition at a meeting in Luxembourg on Tuesday after winning some concessions on implementation and flexibility. 

Speaking at the meeting, Poland's secretary of state and head of the revenue administration Magdalena Rzeczkowska said there still isn't a legally binding mechanism to tie the implementation of the minimum tax to the other part of the global deal, which is related to the treatment of multinational technology firms. 

“We must sustain our goal of fully introducing the global two-pillar solution,“ Rzeczkowska said. “We do not support separation of the two pillars in the EU.”

Poland has in the past threatened to wield its veto powers. It did so most notably over the EU's plan to radically cut greenhouse gas emissions, after Brussels refused to approve its share of post-pandemic stimulus package due to a separate dispute around the country's alleged democratic backsliding.

An EU official said the Polish government is also blocking the minimum tax deal due to the a delay in getting approval from the European Commission for the country's recovery plan over concerns related to the independence of Poland's judiciary.

The official added that the commission is expected to validate Warsaw's cash-for-reforms plan in April, paving the way for an approval of the minimum tax in May during the next meeting of European finance ministers.

The inertia on implementing minimum tax is particularly vexing for France, which has set an objective of getting a deal by the end of its EU presidency in June. French officials have introduced concessions to Poland to make a stronger link in Europe between the two parts of the global deal which around 140 countries including all EU states backed last year. 

“Poland's criticisms have been taken into account and all member states have made an effort to get to this consensus to make major progress for international tax,” French Finance Minister Bruno Le Maire said. “I regret that Poland doesn't understand this and puts forward arguments that are not convincing.” 

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