“Romania supports all measures against budget planning. We believe that this project [for minimum effective taxation of profits of Multinational Enterprises] will help ensure fair competition in the EU internal market. The adoption and implementation of the directive is also a priority for Romania, so we will prepare all the necessary measures for its implementation as of January 1, 2023,” said the Minister of Finance. Adrian Caciu said, quoted by Bursa.ro.
The proposal for a directive on the minimum level of taxation of multinational companies [MNEs] in the European Union was the most important subject on the agenda of the Economic and Financial Affairs Council (Ecofin) which was held on Tuesday 18 January in Brussels. Finance Ministers were invited to confirm, at political level, the priority of this dossier and the need to transpose into EU law, by 1 January 2023, the international rules agreed in the inclusive framework of the Economic Cooperation Organization. and development (OECD).
The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) works on consensual and long-term solutions to tax challenges arising from the digitalisation of the economy. At its meeting on January 29-30, 2020, it decided to move forward with a two-pillar approach. The first pillar focuses on solutions for determining the allocation of taxing rights (“nexus and profit allocation”). Under a second pillar, a system to ensure that multinational companies pay a minimum level of income tax is being developed.
In May 2021, the European Commission published the Communication on business taxation for the 21st century. The Communication sets out a long-term vision to deliver a fair and sustainable EU business environment and tax system, building on the progress made and the principles agreed in global discussions. It also sets a tax program for the next two years, with targeted measures that promote productive investment and entrepreneurship and guarantee effective taxation.
(Picture source: Gov.ro)