Hungary blocks EU deal on 15% minimum corporate tax
Hungary has blocked an EU directive that would impose a 15% minimum tax on multinational corporations, arguing the levy would deal a "low blow" to European competitiveness and endanger jobs.The levy would apply to large companies with annual revenue exceeding €750 million.The tax reform is part of a global deal achieved last year at the Organisation for Economic Co-operation and Development (OECD).
It has been endorsed by 136 countries representing more than 90% of global GDP.The coronavirus pandemic injected momentum into the talks as governments around the world scrambled for ways to boost their fiscal revenues and finance the costly recovery.The reform is estimated to generate over €140 billion in additional income for public coffers every year.The OECD deal needs to be transposed into EU law through a directive so as to become effective across the bloc.
But tax matters are one of the few policy areas where unanimity is required, making it possible for a single country to paralyse the entire agreement."Europe is in deep enough trouble without the global minimum tax," Hungarian Foreign Minister Péter Szijjártó said this week. "We’re not supporting a hike in taxes for Hungarian companies and we’re not willing to put jobs in danger."Szijjártó also told US Secretary of State Antony Blinken that the 15% tax would "mean another low blow for European competitiveness" in the midst of the Ukraine war, even if the deal is meant to be applied at the global level, not exclusively to Europe.Hungary currently offers a 9% corporate tax rate, the lowest across the European Union.Hungary, Estonia and Ireland were initially opposed to the OECD deal, which aims to restore a level playing field among nations after years of competing
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