Sanctions on Russia; Carbon border adjustment mechanism; Corporate taxation: Fair and effective taxation for multinational groups; Economic governance review & fiscal guidance; Council priorities for the EU budget 2023; VAT e-commerce package
Carbon border adjustment mechanism
Today, the Council reached agreement (general approach) on the Carbon
Border Adjustment Mechanism (CBAM) regulation, which is one of the key
elements of the European Union’s ‘Fit for 55’ package.
The main objective of this environmental measure is to avoid carbon leakage. It will also encourage partner countries to establish carbon pricing policies to fight climate change.
For that purpose, CBAM targets imports of carbon-intensive products,
in full compliance with international trade rules, to prevent
offsetting the EU’s greenhouse gas emissions reduction efforts through
imports of products manufactured in non-EU countries, where climate
change policies are less ambitious than in the European Union. It will
also help prevent the relocation of the production or the import of
carbon-intensive products.
The agreement in the Council on the Carbon Border Adjustment
Mechanism is a victory for European climate policy. It will give us a
tool to speed up the decarbonisation of our industry, while protecting
it from companies from countries with less ambitious climate goals. It
will also incentivize other countries to become more sustainable and
emit less. Finally, this mechanism responds to our European ambitious
strategy that is to accelerate Europe’s energy independence.
Bruno Le Maire, French Minister for Economic Affairs, Finance and Recovery
The Council still has to make sufficient progress on a number of issues which are closely related to CBAM, but
are not part of the draft legal text of the CBAM regulation. This
concerns in particular the phase-out of the free allowances allocated to
industry sectors covered by the CBAM, established by the EU ETS
directive, and appropriate solutions on the issue of limiting potential
carbon leakage from exports, so that economic efficiency, environmental
integrity and WTO compatibility of the CBAM are ensured.
Once sufficient progress will have been achieved at the Council, the
Council will start negotiations with the European Parliament, after the
latter has agreed its position.
Corporate taxation: Fair and effective taxation for multinational groups
Member states have made progress towards an agreement on the
directive, presented in December 2021 by the European Commission, to
implement the minimum tax component of the OECD's international tax
reform at EU level.
The ‘Pillar 2’ directive should, once effectively implemented, limit
the race to the bottom in corporate tax rates. Large multinationals,
with a combined annual turnover of at least EUR 750 million, will be
taxed at a minimum rate of 15%. The new rules will reduce the risk of
base erosion and profit shifting, and ensure that the largest
multinational groups pay the agreed global minimum rate of corporate
tax.
We have made major progress on the minimum taxation
directive. An agreement is within reach to end the race to the bottom.
Multinational companies will have to pay a minimum of 15% of taxes
worldwide.
Bruno Le Maire, French Minister for Economic Affairs, Finance and Recovery
Economic governance review & fiscal guidance
The Commission presented its fiscal guidance for 2023 which should help member states in the preparation of their Stability and Convergence Programmes due in April. In response to this, the Eurogroup issued a statement yesterday.
The Commission also provided an update of the state of play on the economic governance review following public consultation and discussions in the relevant committee with member states.
Debriefing on the informal meeting of heads of state or government, Versailles, 10-11 March 2022
The presidency briefed ministers on the main outcomes of the informal
meeting of heads of state or government held in Versailles on 10-11
March 2022.
Council priorities for the EU budget 2023
The Council set its priorities for the 2023 EU budget. The approved
guidelines will serve as a reference in the coming budget cycle.
EU budget discharge
The Council adopted a recommendation on the discharge to be given to
the Commission in respect of the implementation of the EU budget for
2020.
Export credits
The Council has, for the first time, adopted conclusions on export credits that make three major advances.
Firstly, they commit member states to adapt their export credit
policies to the objectives of fighting against climate change. This
progress directly echoes the dynamic initiated in April 2021 by France
with the Export Finance for Future coalition, whose commitments are now
taken up by all EU member states. Secondly, these conclusions strengthen
the EU's assertiveness on the international scene, by pushing for the
modernisation of the export credit rules at the OECD. Thirdly, in the
wake of the work undertaken by the European Commission on the Trade
Policy Review, these conclusions lay the foundations for a new EU export
credit strategy, for which a phase of in-depth diagnosis of needs will
begin.
VAT e-commerce package
The Council adopted conclusions on the implementation of the
e-commerce package. The VAT e-commerce package entered into force on 1
July 2021. It provided for a number of changes in the VAT legislation to
overcome the barriers to cross-border online sales and to address
challenges arising from the VAT regimes for distance sales of goods and
business-to-consumer supplies of services, and for the importation of
low value consignments.
The Council also adopted without discussion the items that figured in the list of non-legislative A items.
ECOFIN
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