Hungarian Parliament Rejects Directive On Global Minimum Tax

  • 22 Jun 2022 8:58 AM
  • Hungary Matters
Hungarian Parliament Rejects Directive On Global Minimum Tax
Hungary rejects plans to introduce a global minimum tax as it would jeopardise jobs, Tamás Menczer, state secretary at the foreign ministry, told public broadcaster M1.

The introduction of the tax which the European Union favours would undermine the government’s tax-cutting policy, Menczer said.

He said such a measure would involve raising the corporate tax from 9% to 15%, weighing on producers “rather than on global tech companies that generally don’t like paying taxes”.

Hungarian Parliament Rejects Directive On Global Minimum Tax

Parliament adopted a resolution on Tuesday opposing a planned European Union directive on introducing a global minimum tax on large corporations.

Adopted with 118 votes in favour, 32 against and 6 abstentions, the resolution said parliament opposed the directive in view of the inflation and economic crisis caused by the war in Ukraine.

In its reasoning, parliament said that the directive would precede global regulations, with research on the matter lagging behind. Hungary also sees it as doubtful that domestic supplementary taxes would be recognised abroad, the resolution said.

During the parliamentary debate, state secretary András Tállai noted that the EU directive would require multinational companies operating in member states where the corporate tax is below 15% to pay the difference in their home countries.

The aim is to stop companies from relocating to countries offering lower taxes, he said. Tállai noted that the tax was originally proposed in the OECD, and would have targeted tech multinationals, which at the time paid “a fraction” of the taxes of other companies.

The measure would eliminate tax competition, and curb the development of countries like Hungary, he said.

The corporate tax rate is 9% in Hungary.

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