Hungarian economy minster proposes rethink of proposed mandatory disclosure for aggressive tax planning schemes
Economy Minister Mihály Varga proposed a rethink of measures to counter tax avoidance presented by the European Commission at a meeting of European Union finance ministers in Brussels on Tuesday because they would disproportionately increase the administrative burden for businesses.
The Ecofin meeting discussed the European Commisson‘s proposal to introduce a mandatory disclosure regime for aggressive tax planning schemes. Such schemes take advantage of the technical features of a tax system or mismatches between two or more tax systems to reduce overall tax liabilities.
There is no assurance the cost of complying with such a directive can be recouped, Varga said, according to a statement released by the economy ministry.
Hungary supports all EU-level measures that crack down on tax evasion and is open to discussing the EC’s initiative, he added, acknowledging that the proposal has not been fleshed out entirely and needs to be negotiated further.
Varga pointed out that Hungary had boosted tax revenue by 420 billion forints (EUR 1.36bn) over two years with a series of measures designed to reduce tax avoidance.
An impact assessment attached to the EC’s proposal noted that a public consultation on the need to impose mandatory reporting obligations for aggressive tax planning schemes was supported by 95 percent of NGOs and 68 percent of private citizens but only 17 percent of business associations and tax advisors.