At the Meeting of Minister G. Skaistė with OECD Secretary-General M. Cormann – the Issue of International Review of Corporate Income Tax Principles

Today Minister of Finance Gintarė Skaistė had a meeting with Secretary-General of the Organisation for Economic Cooperation and Development (OECD) Mathias Cormann. The meeting focused on the international process on the review of corporate income tax principles, also the cooperation between Lithuania and the OECD has been discussed.

According to the Minister, it is now essential to find an agreement acceptable to all involved parties concerning a new international corporate income tax regime and to ensure a level playing field for all parties. The Minister stressed that in this respect the OECD had a crucial role.

“Lithuania, together with other 133 countries, supports the main goal of international consensus – to combat aggressive tax planning and to tax multinational corporations more fairly wherever they operate or generate profits. We need to find a consensus-based solution that ensures a level playing field, while at the same time harnessing the ambitions to introduce excessive exemptions to the new regime. Another important issue is the effective and consistent implementation of the consensus, in particular in Pillar II for the minimum corporate income tax rate, at EU level. Tackling these issues will enable to assess more clearly the potential impact on different corporate income tax models in the region and the space for possible changes in corporate taxation at national level," said Minister G. Skaistė.

The core of this global consensus is the two-pillar agreement: Pillar I – the aim is that multinational largest companies pay taxes also in countries where they generate revenue (these new principles would apply to multinational companies with EUR 20 billion turnover and which generate output of 10 %); Pillar II – introduction of a minimum global corporate income tax (at least 15 %) for large multinational corporations exceeding the EUR 750 million annual turnover threshold, thus addressing the problems related to profit shifting.

According to the Minister, it is expected that a political decision on changes in the international corporate income tax regime could be taken in October, reaching agreements necessary for their implementation before the end of this year.

At the meeting with Secretary-General M. Cormann it was also noted that Lithuania was delighted with intensive cooperation with the OECD. For example, Lithuania was one of the first countries to introduce the automatic exchange of tax information – one of the most important activities of the organisation ever in expanding the scope of tax transparency. The initiative currently connects over 100 jurisdictions worldwide, and EUR 107 billion of additional taxes has been charged since 2009.

The Minister of Finance also welcomed a successful cooperation between Lithuania and the OECD, including the cooperation in the context of the OECD Economic Review of Lithuania.