EU Boosts Tax Cooperation, Seeks US Trade Deal Amidst Global Tax Reform

The EU is actively pursuing a fair trade agreement with the US, aiming for reciprocity through the elimination of tariffs on industrial goods and the reduction of non-tariff barriers. EU Trade Commissioner Maros Sefcovic has emphasized that achieving this goal necessitates substantial collaborative efforts from both sides.

Discussions have encompassed the mutual removal of tariffs on all industrial products, addressing global overcapacity issues in the steel and aluminum sectors, and enhancing supply chain resilience for semiconductors and pharmaceuticals. The EU Commission has affirmed its commitment to continuing these discussions in a constructive manner.

Simultaneously, the EU is strengthening tax cooperation within its internal market. The EU Council is reinforcing fiscal regulations for businesses through the approval of the DAC9 directive, which implements the G20/OECD global tax reform agreement initially established on July 2, 2021.

This directive is designed to ensure a minimum corporate tax rate of 15% for companies with an annual turnover of at least 750 million euros. It also addresses the taxation of digital companies, ensuring that web operators pay their fair share of taxes.

While the minimum tax ('Pillar 2') is a community initiative, the tax policy for internet operators ('Pillar 1') is part of an OECD agreement. The EU Council agreement simplifies reporting for large companies by allowing centralized filing of tax information (Ttir).

A standard form for Ttir filing across the EU, aligned with the G20 and OECD's Base Erosion and Profit Shifting (Beps) framework, will be introduced. The Dac9 directive will take effect the day after its publication in the Official Journal of the European Union.

Member states must adopt and publish the laws, regulations, and administrative provisions necessary to comply with the directive by December 31, 2025.