Estonia called for EU flexibility on the Pillar 2 global minimum tax, stressing small states’ right to decide implementation.
Estonia announced a call for flexibility in implementing the Pillar 2 global minimum tax during a recent EU finance ministers’ meeting on 13 November 2025, the Ministry of Finance said. The country is among five EU member states that have postponed certain Pillar 2 rules under Council Directive (EU) 2022/2523.
“We recognise that it may be difficult to reopen the directive, but will nevertheless continue to defend our simple and transparent tax system. Today’s discussion showed that more than ten Member States share similar concerns, which gives us reason for optimism. The issue has become one of European competitiveness, as other major economies are not applying the minimum tax in the same way,“ said Minister of Finance Jürgen Ligi.
When the global minimum tax agreement was reached under the OECD Inclusive Framework in 2021, it was supported by 137 jurisdictions. By 2025, 55 countries have implemented the system – in most cases voluntarily, deciding themselves whether and how to apply the rules. The EU is the only region where the rules have been made mandatory through a directive, leaving no national flexibility.
If large economies such as the US are granted carve-outs from the system, the same flexibility must also be available for small economies like Estonia. Otherwise, the level playing field will be distorted, EU competitiveness weakened, and strategic investment decisions affected.
Under the current EU directive, five Member States – Estonia, Latvia, Lithuania, Malta and Slovakia – may defer implementation until 2030. Estonia considers it essential that small countries maintain the right to decide on the implementation of the minimum tax also beyond that date.
Estonia is also concerned that substantial changes currently being discussed at the OECD could automatically become part of EU and national law. For such major amendments, the directive should be formally reopened, ensuring that national governments and parliaments remain part of the decision-making process.
At the same meeting, finance ministers also discussed financing Ukraine through the use of frozen Russian assets. Estonia supports the European Commission’s proposal to allocate part of the assets held at the European Central Bank to Ukraine through a limited liability loan agreement.
Estonia firmly holds the position that the aggressor must pay for the damage caused, and that the use of frozen assets provides a practical, albeit partial, way to ensure this responsibility.
