Pentus-Rosimannus was at Tuesday's meeting of EU finance ministers at which the opposition to the packaged, which would help eradicate tax havens and ensure larger firms pay their fair share of tax, proponents argue, was voiced. Estonia is joined by Poland and Hungary in its opposition.

The package is split into two pillars

Pillar one requires the largest firms – with a turnover over €750 million per annum – to pay tax where they operate, and not just where they are registered, while pillar two concerns the tax rate and is aimed at companies, including tech giants, paying their fair share in tax

While it had taken nearly five years to reach agreement on the regime, at the OECD, the EU is now moving fast to make it a reality, with the European Commission converting pillar two into an EU bill in late December, and the deadline for implementation set a year from now.

The bill for pillar one is due in July, pending a multi-lateral agreement to be signed, again at the OECD.

Pentus-Rosimannus told ERR that: "The current proposal for a directive does not leave EU member states free to decide whether to apply a minimum tax at national level to companies above €750 million – an agreement at OECD level actually provided for this possibility, so the European Commission has gone beyond the agreement here."

In addition, Estonia is concerned that the tax package approved by the Organization for Economic Co-operation and Development (OECD) consists of two pillars – a digital tax and a minimum tax, but the launch of the first pillar may be delayed.

OECD support does not equate to Estonian support, necessarily, the finance minister added.

"While Estonia has given its consent to the tax agreed at the OECD level, this does not mean that we automatically agree with the directive. The approval process is a standard one within the EU, one where Estonia can continue to stand up for its interests," she continued.

According to the Estonian Minister of Finance, the draft directive published by the European Commission on December 22 and presented to the finance ministers of the member states on Tuesday largely takes into account Estonia's interests and "maintains our current corporate tax system supporting jobs and investments."

"If we can find a solution to these concerns, there is no obstacle to approving the draft in principle, at EU level, as early as March," the minister added.

One of the key sticking points is the digital aspects of the proposed tax, which would require tech giants to pay tax in any EU countries in which they make a profit, including Estonia.

While the European Commission prepared and published a draft minimum tax directive in December, which now needs quick approval, Pentus-Rosimannus said that the draft should have come out in June.

Both aspects of the package, the minimum tax and the digital tax, should be addressed together, Pentus-Rosimannus said.

The minimum tax initiative should enter into force in 2023, under the OECD pact, but according to Estonia's interpretation of the latter, Estonia is not obliged to apply it domestically.

An EU directive, however, means the tax would need to be applied uniformly in all member states.

The €750-million turnover minimum, beyond which the tax applies, means the bulk of companies will not be affected, however, Pentus-Rosimannus said.

"This has been a tense struggle for us and we have achieved this. We were as a result able to confirm yesterday that we will surely be a constructive participant in future discussions on the directive," she went on.

Estonia was joined by Poland and Hungary in protesting the planned timetable as agreed by the G20 countries in the autumn.

Part of their concern is that U.S. President Joe Biden will not be able to implement a similar regime in the U.S., leaving Europe at a disadvantage.

EU tax agreements require unanimous support.

A delay might harm the EU's reputation internationally in enforcing agreements which counter tax evasion.

The OECD's two pillars are in fact legally independent of one another.

Other countries, such as Sweden, say that domestic law, for instance, will hamper their progress in meeting the January 2023 deadline though Sweden's finance minister said he was confident a solution would be met.

Estonia agreed in principle to join the OECD reform in October.

Estonia's current taxation system

Estonia imposes no corporate income tax on retained and reinvested profits, meaning resident companies and permanent establishments of foreign entities (including branches) see a 0 percent income tax rate on all reinvested and retained profits, along with a 20 percent income tax only for all distributed profit.

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