The minimum tax is an effective instrument to increase public revenues and to curb profit shifting and tax competition by large multinational enterprises. Nevertheless, there is reason for criticism: For example, the latest agreement partly lacks ambition and is clearly in favor of countries of the Global North: While countries of the Global South could not get their way on a higher redistribution percentage and minimum tax rate, the EU tax havens Ireland and Hungary managed to limit the minimum tax rate to 15%.
 

Prof. Joachim Englisch pointed out the legal problem that the European Court of Justice could consider the Minimum Tax as a violation of the freedom of establishment and discussed possible solutions to this. According to him, the EU must consider alternatives to unanimity and more flexibility, such as a future increase of the minimum tax rate, when implementing it.
 

Director Benjamin Angel, DG TAXUD, praised the agreement as a milestone, especially in view of the highly divergent interests of the negotiating states. The task of the European Commission is now to draft a directive as quickly as possible. The proposed directive will be vastly based on the international agreement and at the same time ensure fair tax treatment of domestic and multinational enterprises in Europe. To the surprise of many, Angel announced that the Commission's proposal would be published as early as December 2021 and its implementation is scheduled for 2023.
 

Theresa Neef of the EU Tax Observatory voiced regret that the agreement does not allow for any room for maneuver upwards, as a fixed tax rate of 15 % was agreed upon. According to Neef, if the minimum tax rates were raised further, revenues would increase disproportionately. For example, revenues in the EU-27 would already double with a 6-percentage point increase in the minimum tax. Neef therefore stressed that EU legislation must remain flexible regarding the tax rate. Furthermore, she highlighted the imbalance within the EU states: since the share of corporate headquarters is significantly higher in the “old” EU member states, they benefit more from the current agreement than the “new” member states, at least in the short run.
 

Dominik Bernhofer, Head of the Tax Law Department at AK, viewed the outcome of the latest agreement with mixed feelings. He highlighted the achievement of a broad global deal, which will facilitate implementation in the EU. However, he also referred to the unequal balance of power between high and low income countries in international corporate taxation and criticized the significant concessions made to Ireland and Hungary, which managed to limit the minimum rate to 15%. Given the remaining significant implementation risks, he argued for a Plan B to unanimity. Furthermore, he emphasized the implementation potentials of the minimum tax, such as unitary taxation and the possibility of lowering the threshold below 750 million euros in order to generate additional revenue for the member states.
 

In the statement of Evelyn Regner, MEP of the S&D, the agreement was assessed as a historic step towards more fairness and transparency. The minimum tax ensures adequate and transparent taxation of multinational companies and hampers profit shifting. Nevertheless, there are points that require further development, e.g. the topic of the digital tax has still not been fully clarified.
 

The webinar builds up on the webinar of 1 July 2021, in which the political and legal challenges and potential risks of an effective implementation of the global minimum tax were discussed on a technical level.