By David Lawder
WARSAW, May 16 (Reuters) - U.S. Treasury Secretary Janet Yellen will thank Poland for hosting millions of Ukrainian war refugees on Monday, but she has another goal for meetings in Warsaw: persuading Polish leaders to back plans to implement a 15% global corporate minimum tax.
Poland is the lone holdout in the European Union's implementation plan, having vetoed a compromise in April to launch the 137-country deal reached last October aimed at ending a competitive downward spiral in corporate tax rates. .
Poland's new finance minister, Magdalena Rzeczkowska, has sought a "legally binding" link between the global minimum tax and the other pillar of tax negotiations -- a reallocation of some taxing rights for large, highly profitable multinationals to "market countries" where their services and products are sold.
For some countries participating in the Organisation for Economic Co-operation and Development's negotiations, that so-called "Pillar 1" plan is the more desired global tax change, allowing them to collect revenue from large U.S. technology giants such as Google owner Alphabet, Facebook owner Meta, Amazon.com and Apple.
But the reallocation pillar was not part of the October deal and is not fully developed. That more complex plan requires changes to international tax treaties, and Rzeczkowska has expressed concerns that if it fails, the global minimum tax would put undue burdens on European businesses.
French Finance Minister Bruno Le Maire, current chair of EU finance ministers, has expressed skepticism over those arguments amid ongoing legal disputes between Poland and the EU.
EXTRA REVENUE
Yellen is due to meet with Rzeczkowska, Polish Prime Minister Mateusz Morawiecki and central bank governor Adam Glapinski. She also is scheduled to tour a World Central Kitchen facility providing meals to Ukrainian refugees and a Jewish history museum.
A person familiar with OECD tax negotiations told Reuters that Yellen is expected to emphasize the benefits for Poland in adopting the global minimum tax, namely an estimated https://www.taxobservatory.eu/wp-content/uploads/2021/10/Note-2-Revenue-Effects-of-the-Global-Minimum-Tax-October-2021.pdf $2 billion in annual revenue, which could help defray the high costs of hosting Ukrainian refugees.
"Importantly, these revenues are going to be paid by large multinational corporations, not Polish individuals or small businesses," said the source, who was not authorized to speak publicly about the issue and declined to be named. "It's going to move investments from countries that are traditional tax havens to countries like Poland that can compete on the basis of their workforces and their economic fundamentals."