Hungary blocks minimum 15% tax on multinational companies

this Government of Hungary took over this Friday Polandlast Wednesday it finally decided to lift its veto at the ambassadorial level, and prevented regulation imposing a minimum 15% tax on profits of multinational companies The bill, which exceeds 750 million euros, cites the agreement reached by the Organization for Economic Cooperation and Development (OECD) to the European Union. Despite the blockade, France has announced that it will continue its work for the remaining two weeks until the end of the six-month term of the EU Presidency. override the veto In the excesses of the Viktor Orbán Government.

“Nothing justifies Hungary’s veto” had given its consent at previous meetings.” lamented Bruno Le Maire, the French Finance Minister and the current head of Ecofin, who admitted at the end of the meeting that the decision was a “surprise”. The problem is Europe’s taxation decisions require unanimity Of the 27 Member States it was Warsaw that had resisted so far, because in the text it demanded a clear link between the tax and the first leg of the agreement, a commitment to pay taxes where the giants derive their revenues. It’s a decisive element that caused the permanent ambassador to lift his reservations on Wednesday.

But at the last minute, Hungarian Minister Mihály Varga informed his colleagues that he cannot currently support the minimum tax due to the pressure of the war in Ukraine on the country’s economy, businesses and rising inflation. An argument that Le Maire does not believe. “This veto has nothing to do with the minimum tax,” he criticized. As a result, Twenty-Seven failed again for the third time in their attempt to close a deal. “We will continue to work in the coming days. I think we have a chance to come to an agreement. The French presidency” said Paolo Gentiloni, commissioner for economic affairs, about the remaining two weeks until the Czech Republic takes over the reins of the EU on 1 July.

Le Maire said he didn’t give up and will continue to try for the remaining two weeks until the end of the French presidency, because reaching an agreement will result in fairer international taxation and Ending “financial dumping in Europe”. However, he acknowledges that the dossier shows why it is important to open a debate on why the rule of unanimity in taxation decision-making should be abandoned and decisions should be made by qualified majority.

In October 2021, a total of 140 countries reached an agreement within the framework of the OECD to jointly adopt a minimum 15% tax on multinational companies from January 2023. However, at the end of May, at the OECD Secretary General Davos, this target was delayed until 2024 due to difficulties in reaching agreement on its design. However, after this delay, the European Commission continued its goal of implementing the new taxation in 2023, although the new obstacle in Hungary threatened to make this goal impossible.

Source: Informacion

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