A reasoned opinion, the final stage before referral to the EU Court of Justice, regarding the non-implementation by Cyprus and other member states of the agreement to impose a minimum tax of 15% on large multinational companies, is included in the infringement package for May, which was released on Thursday by the European Commission.

The infringement package also includes a reasoned opinion against Cyprus and other member states for the non-implementation of laws concerning corporate transparency and the enhancement of public oversight of multinational companies.

Additionally, the Commission has initiated a new infringement procedure against 18 member states, including Cyprus, regarding the Data Governance Act, specifically the designation of competent authorities to monitor its implementation.

Infringement procedures concern the non-compliance of member states with EU legislation and regulations and can result in the Commission bringing a member state before the EU Court of Justice and imposing fines, although many cases are resolved without such measures.

The first stage of the procedure is the sending of a warning letter, to which the member state initially has a two-month deadline to respond. If the responses are deemed unsatisfactory, the Commission sends a reasoned opinion. If the member state does not comply, the Commission may choose to refer the case to the EU Court of Justice.

The Commission has decided to send reasoned opinions to Cyprus (INFR(2024)0020), as well as Spain, Latvia, Lithuania, Poland, and Portugal, due to the non-notification of measures to transpose into national law the directive for a minimum level of taxation for multinational groups and large-scale domestic groups in the EU (Directive (EU) 2022/2523, known as the Pillar 2 directive under the OECD and G20 global tax reform agreement).

The directive sets the legal basis for implementing the part of the agreement that involves imposing a minimum tax rate of 15% on large multinational enterprises. EU member states were required to implement the relevant legislation for Pillar 2 by December 31, 2023.

While most member states have progressed, Cyprus, Spain, Latvia, Lithuania, Poland, and Portugal have not yet notified their national implementation measures. Therefore, the Commission has decided to issue a reasoned opinion to these member states, which have a two-month deadline to respond and take the necessary measures. Otherwise, the Commission may decide to refer the case to the EU Court of Justice.

The Commission also sent reasoned opinions to Cyprus (INFR(2023)0118), as well as Belgium, Italy, Slovenia, Austria, and Finland, due to the incomplete transposition of the directive on public country-by-country reporting (Directive (EU) 2021/2101), which amends the so-called "accounting directive" (Directive 2013/34/EU).

The directive on public country-by-country reporting aims to enhance corporate transparency and public oversight of multinational enterprises. It contains rules for disclosing information on income tax paid by certain multinational enterprises with revenues exceeding 750 million euros, including multinational enterprises from third countries operating in the EU.

As noted in the infringement package, delays in implementing this policy will undermine efforts to enhance the accountability of these companies regarding the income tax they pay in each member state, thereby jeopardizing citizens' trust in national tax systems.

The Commission issued reasoned opinions to the six countries, which now have two months to respond and take the necessary measures. Otherwise, the Commission may decide to refer the cases to the EU Court of Justice.

The Commission also initiated an infringement procedure against Cyprus (INFR(2024)2056) and 17 other member states (Belgium, Czechia, Germany, Estonia, Greece, France, Italy, Latvia, Luxembourg, Malta, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, and Sweden) for failing to designate competent national authorities to monitor compliance with the Data Governance Act or failing to prove that the designated authorities have the necessary powers.

The Data Governance Act facilitates data sharing between sectors and countries within the EU for the benefit of citizens and businesses, establishing rules for the neutrality of intermediaries connecting individuals and companies with data users.

Data intermediation activities must be strictly independent of any other services they provide, must be registered, and must be recognizable through a common EU logo.

The legislation will also facilitate the reuse of certain public sector data and promote voluntary data sharing.

Based on the principle of "data altruism," citizens will be able to consent to the use of the data they generate for the common good, for example, for medical research projects. Organizations handling such data wishing to be included in the public register and bear the related EU label must be non-profit and meet transparency requirements, as well as provide specific guarantees for the security of citizens' and companies' data.

From September 24, 2023, competent authorities are responsible for registering data altruism organizations and monitoring the compliance of data intermediation service providers.

The 18 member states to which the warning letter was sent now have a two-month deadline to respond and address the deficiencies identified by the Commission. If there is no satisfactory response, the Commission may decide to issue a reasoned opinion.