As Hungary opposed this week’s move, the EU’s efforts to agree on a 15% minimum tax on large corporations ran into another obstacle.
Reims has been trying to mediate the EU compromise for months, but has repeatedly failed due to Polish opposition.
Hungarian Foreign Minister Peter Sijart said he was “not enthusiastic about this idea at all” as it would “deeply hit” European companies after Poland eased its stance this week.
“We are not at all enthusiastic about this idea, especially the current form or situation,” he wrote on Facebook after a call with US Secretary of State Antony Blinken on Wednesday.
Given that Russia’s Ukrainian war has created “serious challenges” for the European economy, imposing new tax burdens on European companies can be “fatal”, he said.
He said he opposed the EU’s advance ahead of other jurisdictions. Because “in other parts of the world, we know when the EU will be introduced.”
Szijjarto and Blinken said they would have further talks later this week.
In October last year, nearly 140 countries, including Ireland, agreed on an overview of a minimum tax of 15% and a deal in which the largest multinational companies would pay some tax in the country where they sell rather than base.
The European Commission submitted a bill last December to implement the 15pc rate. This requires unanimous approval of all 27 EU Finance Ministers.
The Commission will enact legislation on the rest of the transaction once the details are finalized by the Organization for Economic Co-operation and Development (OECD), which drafted and negotiated both agreements last year.
In March, Hungary said it “did not oppose” the EU transaction. This is as long as there is a link between the two “pillars” of trading, the 15% minimum tax rate for companies with annual global revenues in excess of € 750 million and the shift. In taxation rights, this targets a much smaller group of companies with an annual revenue of at least € 20 billion and a rate of return of over 10%.
Poland, which has fought EU officials and courts over judiciary independence and sought approval for a € 35.4 billion pandemic recovery plan, was the EU’s last transaction hold.
The state’s position has eased as the Commission approved the recovery funds earlier this month.
According to an official statement, the EU Finance Minister will meet in Luxembourg on Friday, where they “may” discuss taxes.
Ministers of 19 countries using the euro will meet today to discuss the economic situation and Croatia’s adoption of the euro. This is scheduled for January 2023.
