World
Can new EU corporate tax rules make big business pay its fair share?
A landmark global deal setting a minimum corporate tax rate of 15% on multinational companies came into force in the European Union on 1 January.
The EU has for years tried to flex its muscles on corporate tax evasion by introducing a raft of new laws and lodging high-profile court cases against multinationals.
But some of its own member states – such as Ireland, Luxembourg and Cyprus – have continued to allow high-profit companies to dodge both taxes and scrutiny. Profit shifting worldwide has also remained high, causing losses worth billions of euros for the continent while economic inequality deepens.
Now, companies with revenues of at least €750 million active in any of the 27 EU states will face a minimum corporate tax rate of 15%. The bloc’s economy commissioner Paolo Gentiloni described the new year rules as “a new dawn for the taxation of large multinationals”.
The move is part of a sweeping overhaul of the global tax system agreed by some 140 Organisation for Economic Co-operation and Development (OECD) countries in 2021 after a decade of negotiations, and aims to crack down on governments that slash their corporate tax bills to attract investment.
Other countries such as the UK, Norway, Australia, Japan and Canada are also implementing the measures.
While the new interlocking rules have been hailed as groundbreaking, experts told Euronews there is a need to close crucial loopholes to ensure big business is held accountable.
A ‘revolution’ in tax justice
The OECD deal consists of two pillars, the first of which aims to ensure companies pay tax where they do business. The second pillar sets the global minimum tax rate of 15%.
In an interlocking system hailed revolutionary, if one country fails to tax a multinational at this rate, other countries can charge a so-called “top-up tax”.
This does not mean EU countries will necessarily adjust their corporate tax rate to the 15% baseline, since other countries will be able to step in to collect the taxes due from multinationals that pay their levies in low-tax jurisdictions.
This means that in a hypothetical scenario, a French multinational operating in Senegal and shifting its profits to Ireland could see either France or even Senegal charge a top-up tax if it doesn’t pay the minimum rate of 15% in Ireland.
“The concept is revolutionary,” according to Quentin Parrinello, a senior policy adviser at the EU Tax Observatory.
“It’s the first time we have more than 140 countries, including all major economic actors, agree that multinational companies should pay a minimum amount of tax on the profits it reports.”
“There is, in theory, no incentive for a country not to apply the minimum tax because if they don’t, another country will get the tax revenues,” Parrinello added.
Most EU countries have already transposed the EU Directive – that makes the new rules a reality – into law. Five countries – Estonia, Latvia, Lithuania, Malta and Slovakia – have informed the European Commission that they will delay implementation as they have fewer than twelve affected multinationals operating within their borders.
Too many loopholes
But despite its promise, experts fear the reform alone cannot stamp out tax havens or prevent a so-called ‘race to the bottom’ of harmful tax competition between governments.
States can still abide by the new minimum rate whilst offering generous tax credits and other deductions that effectively reduce the tax rate below 15%. Many states are already introducing attractive transferable credits, grants and subsidies to compete for investment.
“We already see this, for example with the IRA (Inflation Reduction Act) in the US. We also have countries such as Ireland, Switzerland, and the Caymans already thinking of their own systems,” Parrinello explained.
Another loophole in the deal allows firms to exclude certain amounts of profits – equal to 8% of the value of tangible assets and 10% of payroll in the first year – from the tax base.
ADVERTISEMENTThe EU Tax Observatory estimates that this loophole could cost the EU some €26 billion in its first year of implementation. A loophole-free 15% minimum tax could have raised around $95 billion (€87 billion) in the bloc in 2023, the watchdog says, dropping to just $67 billion (€61 billion) with the current design.
“There will not be an end to harmful tax competition and the race to the bottom on taxation,” Chiara Putaturo, Inequality and Tax Policy Advisor at Oxfam’s EU office, said.
“We are seeing a lot of countries like Ireland, Switzerland and also Bermuda changing some of the tax systems they had before to introduce generous refundable tax credit so that they will still be able to have a lower and lower tax rate,” she added.
“The minimum tax is a floor,” Parinello said. “It’s much better to have a floor than nothing. But if you drill holes in the floor, you weaken the overall structure.”
World should move in lockstep
The OECD-designed system is unique in the way it incentivises all world nations to move in lockstep. Countries infamous for attracting giant companies with attractive tax incentives – such as Barbados and Panama – are also signatories.
ADVERTISEMENTAn overwhelming majority of Swiss voters (78.5%) also backed the new rules in a consultation last June, putting pressure on their government to swiftly adopt the rules.
The US and China have not yet passed the necessary legislation but are likely to be incentivised to do so to ensure other countries do not top up their own tax collections at their expense.
But Putaturo warned that the 15% rate, which is lower than the global average, lacks ambition.
“The majority of countries, globally, have an effective tax rate which is higher than 15%. So this could even bring some countries to lower their tax rate, in a race to the minimum rather than a race to the bottom,” Putaturo explained.
“The minimum tax also does almost anything in terms of the redistribution of tax revenues. The so-called resident countries, where multinationals are headquartered, will have the right to top up the tax to 15% if the tax haven does not collect the tax due. This is a problem for poorer countries because the resident countries are mainly rich countries,” she added.
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WASHINGTON (AP) — Mark Schiefelbein has been based in Washington, D.C., with AP for about three years, and before that spent a decade in Beijing at AP’s China bureau.
Here’s what he had to say about this extraordinary photo.
Why this photo?
This was an event that had never happened before in the 250-year history of the United States and may never happen again: a night of mixed martial-arts cage match brawls on the South Lawn of the White House, with bloodied competitors battling it out in front of the president, vice president, and other leaders of the country. AP had other photographers ringside at the event focusing more on the fights themselves. So I felt my role was to capture the context of the evening — the location, the people in attendance, the environment.
How I made this photo
A small group of other photographers and I, the White House press pool, had been allowed to photograph part of the evening from a position in the stands directly opposite the White House. I was carrying four cameras with a variety of lenses from 12 mm to 300 mm. This let me capture everything from ultra-wide views of the “claw” structure built for the fights, to close-ups of leaders and celebrities in attendance. I had been following Diego Lopes with my longest lens as he moved around the ring celebrating his win over Steve Garcia. When I saw him start to climb onto the cage, I immediately realized there might be a possibility of a picture like this and zoomed out to capture more of the scene.
An octagon on the White House lawn for Trump’s 80th birthday and the nation’s 250th, in photos
Why this photo works
The White House is surely one of the most recognizable buildings in the world. The columns of the South Portico, the fighter standing with arms and legs spread wide in celebration, and the octagon padding of the UFC ring tell an entire story as your eyes move from top to bottom of the frame. With Lopes standing with his back to the camera, facing the White House, it becomes less a photo of him and more about the evening, the event, and the spectacle. It was fortunate that it was after nightfall, so things that might have been distracting, like the Marine Band and spectators seated behind the ring, are mostly in the dark. Only the key elements – the White House, Lopes, and the ring are lit up.
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For more extraordinary AP photography, click here.
World
British Prime Minister Keir Starmer faces potential leadership challenge from newly-elected Andy Burnham
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Andy Burnham has officially won his special election and regained a seat in Parliament, setting him up to challenge the deeply unpopular Keir Starmer as the leader of the Labour party and as prime minister.
Burnham, currently the mayor of Greater Manchester in northwest England, won a seat in Makerfield and came away with 55% of the vote in a field of more than a dozen candidates, according to The Associated Press. The runner-up was Rob Kenyon of Reform UK, a right-wing populist party, who received more than 9,000 fewer votes than Burnham.
Burnham last served as a member of Parliament in 2017 but strongly implied in his victory speech that he is returning with the intention to lead the United Kingdom.
“Everyone knows that politics isn’t working. Everyone can feel that the country isn’t where it should be. Tonight could, just could, be the turning point,” he said, according to the AP. “This result will bring about a country that works fairly for everywhere and for everybody.”
TRUMP ALLY NIGEL FARAGE DEALS MAJOR BLOW TO STARMER IN LOCAL UK ELECTIONS AS RESIGNATION CALLS MOUNT
Britain’s Labour party candidate Andy Burnham speaks to supporters after the Makerfield by-election in Ashton in Makerfield, England, on Friday, June 19, 2026. (Jon Super/AP)
This special election, called by-elections in Britain, was unusually significant because the area’s Labour MP, Josh Simons, intentionally resigned to allow Burnham to win the seat and pursue leadership.
The potentially outsized impact of this election was juxtaposed with the strange scene that unfolded when all the candidates gathered on Friday morning to hear the results. Burnham stood in between an independent candidate dressed in a fox costume and another candidate known as “Count Binface”.
As his name suggests, “Count Binface,” whose real name is Jonathan David Harvey, was wearing a trash can on his head and regularly runs in U.K. elections to advocate for increased voter turnout.
Starmer congratulated Burnham in a social media post on X, saying voters “chose Labour’s campaign of hope and optimism over division and hate.”
When asked about Burnham’s intentions to oust him as leader, Starmer said he will fight to remain prime minister, a position he has held for nearly two years.
“I’ve said repeatedly I’m not going to walk away from that,” Starmer told reporters.
Labour party candidate Andy Burnham, center, stands with other candidates on the podium at the Edge Wigan, awaiting the Makerfield by-election result announcement in Wigan, England, on Friday, June 19, 2026. (Jon Super/AP)
AS EPSTEIN-LINKED APPOINTMENT SPARKS BACKLASH, UK PM STARMER FACES PARTY REVOLT AMID RESIGNATION CALLS
Starmer led the Labour party to a landslide victory in July 2024 and ever since, his popularity has been eroding thanks to a persistently high cost of living, an anemic economy and a scandal over his willingness to accept gifts from wealthy donors.
Last September, Starmer was slammed for appointing Peter Mandelson as the British ambassador to the United States, when it was known as early as 2019 that Mandelson had a friendship with convicted child sex offender Jeffrey Epstein. Following an enormous public backlash, Mandelson was quickly dismissed from his post.
With Starmer as leader, Labour is increasingly losing liberal-minded voters to the Green Party, while also facing stronger challenges by Reform UK, a Nigel Farage-led party that advocates against mass migration and in favor of tighter border controls. Farage, an ally of U.S. President Donald Trump, said he was disappointed by Burnham’s victory.
Burnham is expected to head to London to be sworn in as soon as Monday. Under the British parliamentary system, the governing party can hold leadership elections in the middle of the term. The winner of such a contest can become prime minister without there having to be a national election.
British Prime Minister Keir Starmer awaits Switzerland’s Federal President Guy Parmelin on the sidelines of the G7 summit, in Evian-les-Bains, France, on Tuesday, June 16, 2026 (Isabel Infantes/Pool Reuters via AP)
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Under Labour rules, a lawmaker can challenge the leader if they win the backing of a fifth of their party’s members in the House of Commons. Burnham has enough lawmakers on board to trigger a leadership contest, according to a report from The New Statesman.
According to the AP, Culture Secretary Lisa Nandy said Burnham and Starmer will “have a conversation about what comes next” in the next few days.
The Associated Press contributed to this report.
French President Emmanuel Macron and Spanish Prime Minister Pedro Sánchez have issued a blistering rebuke against deportation camps outside the European Union, setting their countries on a collision course with a growing political majority.
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During a summit on Friday, 19 leaders across the bloc signed a joint declaration calling to make “full use” of a new European law that enables the construction of so-called return hubs to host migrants whose asylum applications have been denied.
The coalition, led by Denmark and Italy, two fierce advocates of outsourcing, wants to “move forward with solutions based in third countries as soon as possible”.
But for Macron and Sánchez, this path runs counter to European values and risks squandering financial resources and undercutting relations with neighbouring Africa.
“I am not sure that this is our Europe. I don’t know if these are the fundamental principles on which our Europe was built,” Macron said at the end of the summit on Friday.
“And I don’t think it’s effective, either. The proof is that I have not seen anyone make it work so far,” he went on, underscoring his strong dissatisfaction. (Italy has set up migration centres on Albanian soil but has fallen short of expected targets.)
“I have a lot of respect for anyone who wants to do it. I disagree, both pragmatically and in principle. I think it has nothing to do with European politics.”
Macron said his country was in favour of tougher laws to curb irregular arrivals but drew a red line on the physical transfer of migrants to faraway countries where they have never set foot. That possibility, long considered taboo, is allowed under a revamped Return Regulation described as the “strictest-ever” migration law.
“There is a question, in fact, around these famous return hubs in third countries. France does not support this policy. We are in favour of a more effective return policy. But first of all, I have never seen a return hub in a third country operate,” Macron went on.
“I invite you to consider what it is (in practice): this means that people who do not want to return to their country of origin or who cannot get back to their country of origin will be pushed into a third country, which will accept them in return for money.”
Macron mocked the jargonistic term “innovative solutions” that proponents of migration offshoring often use in their public communication and challenged the notion that host countries would respect human rights in exchange for financial incentives.
“I am a big supporter of innovation in my country,” he said, saying he would later attend the Vivatech festival in Paris. “But I am always very careful when talking about innovation in values and human rights. Allow me to have that reservation.”
Meanwhile, Sánchez, a vocal critic of the measures, said the deportation camps would be an “absolutely inefficient” and “worthless” response to irregular migration.
“It’s a mirage, if you will, that it will simply waste economic resources, and Europe doesn’t have many,” the Spaniard said after the summit in Brussels.
“Secondly, it sends a wrong message to those countries of origin and transit with which we should be collaborating, cooperating and showing empathy towards.”
Macron echoed Sánchez’s reputational concerns and insisted he would not allow EU funds to be used in any capacity to build the deportation camps, which are “neither effective nor do they correspond with our principles”.
“Sometimes, we hear one or the other (country) advocate policies with the African continent, so good luck defending our credibility on these continents by explaining that we will use the money for investments to build return hubs on their continents,” he said.
“What world do we live in?”
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