Breaking news: Hungarian parliament rejects EU 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 EU 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 Tallai noted that the EU directive would require multinational companies operating in member states where the corporate tax is below 15 percent 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 aimed to tax digital multinational companies, which at the time paid “a fraction” of the taxes of other companies, he said. “Then it all changed course. Developed economies are now working to establish a minimum corporate tax,” he said.
Read alsoSzijjártó to Blinken: Hungary does not support global minimum tax
The measure would eliminate tax competition, and would curb the development of countries like Hungary, he said.
The corporate tax rate is currently nine percent in Hungary.
The opposition Democratic Coalition said the resolution was protecting foreign companies. By rejecting it, the government sided with large multinational companies, lawmaker Ferenc David said.
Párbeszéd said earlier they would not support the resolution.
Ruling Fidesz said in a statement after the vote that by supporting a 15 percent global minimum tax, the opposition had “made it clear they would double taxes on corporations”. “This would be a serious burden even in peacetime, let alone during war,” the statement said.
Hungary needs economic growth, tax cuts and investment support in the current situation, “the only way to protect jobs,” the statement said.
Source: MTI
5 Comments
By getting all countries to agree to a minimum corporate tax rate, the Biden administration is seeking to eradicate certain tax havens without hurting the competitiveness of American firms. Yellen has repeatedly said that a global tax, which would apply to companies’ overseas profits, would eliminate what she’s described as a “global race to the bottom” in terms of corporate taxes. A pro American policy, should not be supported.
Why the h*ll are they wearing masks?
Are they surgeons?
So a country which can run its affairs and balance its expenditures with a tax of 5% would be obliged to raise its tax rate simply because other countries cannot balance their budgets and live within their means?
I think all this says more about the mentality of the countries that are in favour of it.
If the Americans (or anybody else) cannot balance their budgets, or cannot help themselves from running up huge debts, that’s their problem. That they seek to drag others into it is simply wrong.
Although there are times when the rights of individuals must be flipped over to obligations of individuals to better protect society as a way to ensure that those with no voice (people under the age of voting, people in hospitals & longtermcare facilities, the extremely poor and therefore probably illiterate or at least uninformed/uneducated) are protected.
However, in my opinion, this trend to force the globalization mindset of politicians, uber wealthy & those who do business all over the world is not a positive way for the future of self determination. If every country ends up exactly the same in business senses, each will always have to take on the full burdens of the countries in which rulers rob their citizens for self pampering rather than building infrastructure for education, travel within the country & establishing avenues for people being self sufficient and self supporting and successful financially and otherwise. We already know that Haiti for instance constantly has it’s hands out while terrible government misconduct goes on. When the weather conditions have destroyed buildings, why are fit adults sitting around playing cards rather than cleaning up & rebuilding? We saw this in many clips & photos while the Canadian representative was doing tours. Why did they refuse to allow free homes to be built for them out of local materials that regenerate, insisting instead on materials from the US which is not as suitable to Haitian climate, skill, availability & income? Globalization would end up with some countries working hard to get ahead & others being a bottomless pit.
Our 9% corporate rate is specifically DESIGNED to attract direct foreign investment – moving operations from other countries or setting up greenfields to take advantage of this low rate (in international comparison). And EU backed grants and incentives, of course. We balance the corporate tax shortfall by our world 4th highest indirect tax / VAT rate of 27% (VAT is paid by the END USER, FYI – the CONSUMER).
The Business Tax (typically 2%) is generally not recognized in the calculation of the minimum tax levied. It is also pretty unique (levied over turnover, not profit). Perhaps a sign there’s the need for an overhaul, if this is an issue? There is still time!