Brussels weighs redirecting OECD minimum-tax revenue to fund next EU budget

Redirecting revenue from the OECD global minimum corporate tax into the EU budget has emerged as a possible way to break a deadlock in negotiations over the bloc's next seven-year financial framework, four EU diplomats with knowledge of the talks told POLITICO.

The European Council President António Costa is pressing member states to agree on new EU-wide taxes — known as own resources — to reduce direct national contributions to the budget, the latest proposal for which stands at €1.82 trillion. Costa wants a deal among leaders before the end of the year, citing upcoming elections in Poland, France and Italy as a threat to the timetable.

Five new own-resources options are on the table. The European Commission estimates they would together generate €65 billion per year, but governments remain divided. A corporate levy called CORE — which charges a lump sum on companies with revenues exceeding €100 million — has drawn the sharpest opposition, particularly in Germany.

To move past CORE, French President Emmanuel Macron backed funnelling part of the OECD minimum-tax proceeds to the EU budget at an October leaders' summit, two of the four diplomats said. Under the 2021 OECD deal, EU countries are required to impose a 15 percent minimum corporate tax on large multinationals with annual turnover exceeding €750 million, with a top-up levy applied to companies headquartered in low-rate jurisdictions. That revenue currently stays with national governments.

Pascal Saint-Amans, a former OECD official and one of the architects of the global tax arrangement, said the approach differed fundamentally from CORE. "The corporate income tax is about taxing based on profitability," he said, adding that CORE, by contrast, "is about taking a toll blindly."

Countries collecting large sums from the existing top-up tax — including Ireland and the Netherlands, which apply low corporate rates — could face reduced receipts if part of the revenue were redirected to Brussels.