European Parliament's Subcommittee on Tax Matters Discusses Pillar Two, EU Anti-Tax Avoidance Rules and Tax Incentives
Steve Davies · Posted on: May 30th 2025 · read
On 15 May 2025, the European Parliament's Subcommittee on Tax Matters (FISC) held a public hearing on "The Implementation of the Pillar Two Framework in View of International Developments and EU-US Relations".
In this public hearing, members of the FISC heard reports from representatives of the OECD and academia.
During her intervention, Ms Manal Corwin of the OECD highlighted the importance of international cooperation in tax matters amidst the evolving and increasingly complex landscape, gave examples of successful international cooperation initiatives and noted that the Pillar One and Two solution was "the latest effort to preserve the commitment of governments to effective international tax cooperation".
She underlined that 67 jurisdictions have already implemented (or taken steps to implement) the global minimum tax, and that the OECD was committed to working with all members, including the EU Member States, to bridge the differences and to further "the shared objectives of protecting tax bases, maintaining a level playing field, and fostering sustainable growth". Her statement can be read here.
In his contribution, Prof. Petr Janský of Charles University, Prague focused on the economic aspects and presented the findings of his research on the scale of tax avoidance by multinationals, the effects of the Base Erosion and Profit Shifting project and the global minimum tax. His presentation can be found here (as a PDF).
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Finally, Prof. Nadine Riedel of the University of Münster spoke of the adverse implications that Pillar Two implementation could have in the European Union, especially if other major players, such as the United States, China and India, decided not to implement the global minimum tax.
In this scenario, EU Member States would be at a competitive disadvantage, due to increased tax costs and compliance burdens, among other things. She acknowledged that countering international tax avoidance was a valid objective but warned against engaging in "symbolic policies with little impact on corporate tax revenue collection and with potentially high economic and administrative costs". Her statement and presentation can be found here and here (both as PDFs).
The discussion that followed revolved around ways to address the concerns of the United States with the global minimum tax implementation, viability of moving forward with the global minimum tax solution in the current international landscape, and the position of non-OECD Member states on Pillar Two.
In its morning session, the FISC also organized a workshop on tax incentives to stimulate private investment and held a public hearing on the future of the EU tax avoidance rules (see here and here). The workshop discussed key findings from the study requested by the FISC on Tax incentives and investments in the European Union. The hearing on "The future of EU anti-avoidance tax rules, including simplification" analysed the European Union's progress in tackling corporate tax evasion and avoidance, with a particular focus on the EU anti-avoidance framework and included presentations by the following experts: Mr Francesco De Lillo, IBFD (statement here), Ms Saara Hietanen, Finnwatch (statement here), Dr Borbála Kolozs, Eötvös Loránd University (statement here) and Mr Bob Michel, Tax Justice Network (statement here).
Our expert specialist concludes
"The FISC hearing highlights that while Pillar Two aims to create a fairer global tax framework, it also introduces significant operational challenges. For in scope multinational groups, this means building resilient compliance and risk management systems to effectively navigate through the complexity and uncertainty brought on by these new rules, especially if key jurisdictions diverge from the global standard."
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