Hungary opposes EU implementation of global minimum tax

Hungarian Prime Minister Viktor Orban arrives for the European Union leaders’ summit, as EU leaders try to agree on Russian oil sanctions in response to Russia’s invasion of Ukraine, in Brussels , Belgium, May 30, 2022. REUTERS/Johanna Geron/File Photo

BUDAPEST, June 14 (Reuters) – Hungary on Tuesday raised objections to the introduction of a comprehensive minimum tax in the European Union, saying it could only support a proposal that does not disadvantage companies operating in Hungary, and citing additional risks due to the Ukraine war.

Nearly 140 countries reached a two-pronged agreement in October brokered by the Organization for Economic Co-operation and Development (OECD) on a minimum tax rate of 15% on multinationals.

The deal would make it harder for companies such as Alphabet’s Google (GOOGL.O), Amazon (AMZN.O) and Meta’s Facebook to avoid tax by reserving profits in low-tax jurisdictions .

Individual countries must now hammer out details of how to implement the deal before the OECD’s 2023 deadline. France, which holds the rotating EU presidency for six months, has pushed for rapid implementation in the 27-nation bloc, where tax issues require unanimous approval.

Poland continues to block a compromise, and now Hungary has also expressed reservations. Read more

“The drafting of the detailed rules for the OECD proposal for a global minimum tax and the adjacent EU Council proposal are not progressing at the planned pace,” the Hungarian government said in an email response on Tuesday. questions from Reuters.

The government said the introduction of the OECD proposal to tax large digital companies was delayed, while companies creating jobs in Hungary would be taxed immediately.

“In addition, competitiveness risks also need to be assessed due to the Russian-Ukrainian war,” he said.

On Monday, Prime Minister Viktor Orban’s ruling Fidesz party proposed a draft resolution by parliament’s economic committee that says parliament should oppose the approval of EU directives on global minimum tax, due to “wartime inflation and wartime economic crisis”.

Reporting by Krisztina Than; Editing by Jan Harvey

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