Despite Hungary’s veto, the EU will introduce a global minimum tax
The Hungarian diplomacy has previously accepted, but now vetoed, the European Union’s proposal. Brussels wants to work with member states to adopt a global minimum corporate tax law.
Hungarian veto in the EU
“Tax laws can only be adopted in the European Union if they are supported by all member states,” Prime Minister Gergely Gulyás said at a cabinet briefing on Thursday. Gulyás argued that the European Union would not be able to accept a proposal that the Hungarian government did not like.
Brussels is asking Member States whether they would be willing to vote in favour of a 15 percent global minimum corporate tax. This could be done in the framework of a so-called enhanced cooperation. This would not require 100 percent support, hvg.hu reports. If the plan succeeds, EU finance ministers could vote on the global minimum corporate tax law in Luxembourg in October.
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Global minimum tax
US Treasury Secretary Janet Yellen invented the global corporate minimum tax to fill the US coffers. Something similar is needed for the European Union. The Covid pandemic, the energy crisis and Russia’s war in Ukraine have all had a negative impact on finances.
The Organisation for Economic Co-operation and Development (OECD) has developed the proposal, which is backed by more than 130 Member States. The support is so high because everyone would like to see multinationals taxed where the profits are made, rather than in tax havens.
The global corporate minimum tax only applies to large global companies. Giant global companies with an annual turnover of more than USD 750 million (EUR 746 million). US Republicans oppose a global corporate minimum tax. It is possible that this is why Hungarian Prime Minister Viktor Orbán decided to veto it. Brussels now wants to bypass the Hungarian veto.
Minister of Foreign Affairs Péter Szijjártó spoke about the global minimum tax in Washington this summer, Index.hu reports. “The introduction of a global corporate minimum tax would be a virtual coup de grace for the European economy in the current situation, and the measure would also put Hungary to an extraordinary test,” the Foreign Minister said.
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Source: index.hu, hvg.hu