Global minimum tax for corporations would harm competitiveness, says Hungarian ruling party

Competitiveness would suffer if the European Union adopted a directive on a global minimum tax for large corporations, the head of the Hungaian parliament’s economic committee said on Monday.

The committee will submit a proposal calling on Hungary’s parliament to reject the directive, Erik Banki of ruling Fidesz said. The step is in response to “wartime inflation” and economic crisis resulting from the Russia-Ukraine war, Banki added.

The OECD earlier initiated the global taxation of digital multinational corporations, he noted.

“As these companies shirk paying taxes”, the initiative was met with almost unanimous approval, he said.

The tax was to be introduced from 2023, but it is expected to be delayed by at least a year, he added.

Meanwhile, another initiative proposed a global tax for all large corporations, which would greatly impact the foreign companies operating in Hungary, he said.

The details of the measure should be carefully honed before adopting the EU directive to avoid double taxation, which could confuse investors, he warned.

Adopting the EU directive ahead of the OECD regulation would harm competitiveness in Hungary and the EU, and shorten preparation time for the companies involved, Banki said. Parliament’s economic committee will meet on Monday afternoon to discuss the draft proposal, he said.

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Source: MTI