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Minister Pentus-Rosimannus: Estonia is ready to defend its corporate tax system at EU negotiations over the tax directive

25. November 2021 - 11:40

Minister of Finance Keit Pentus-Rosimannus met with the Director-General for Taxation and Customs Union Mr Gerassimos Thomas on Wednesday, November 24 to discuss the ongoing international tax reform. According to the minister, Estonia’s adoption of the EU directive on the OECD-led global minimum tax is highly conditional upon the possibility to retain Estonia’s current investor-friendly corporate tax system.

„As the European Union talks regarding the directive are about to start, we intend to make sure that the change will impact only the large multinationals with the revenue exceeding EUR 750 million, and leave the rest of our existing system untouched,“ said the Minister. „Estonia values fair tax competition and simple efficient tax rules that do not hinder the growth of business.“

„We are keen to maintain our current tax system as it encourages both job creation and innovation,“ the Minister added. „Even now, our revenue from corporate tax is comparable to that of many large countries where the nominal tax rates are much higher.“

In addition to the global minimum tax, the EU is also planning to amend the Code of Conduct on Business Taxation. The Code aims to prevent the crossborder schemes directed at either total tax exemption or double non-taxation.

„We wouldn’t want the EU to open several tax battlefronts at once“, the Minister shared. „It would be reasonable to await the outcome of the one major reform – the global minimum tax – before launching into debates over the next.“