Hungarian government against barriers to fair tax competition

Budapest, Hungary. Photo: MTI

Hungary rejects any kind of international tax regime that would hinder fair tax competition, Finance Minister Mihály Varga said after a conference call with his European Union counterparts on Tuesday.

Under a proposal for a global minimum tax rate, if the amount of tax paid by a multinational group in a given country falls below the proposed rate, the difference would be collected by the country where the company is headquartered, the Finance Ministry quoted Varga as saying.

Such a system would be harmful to Hungary, he said, noting that Hungary’s 9 percent corporate tax rate is the lowest in the European Union.

Hungary considers it crucial to examine the compatibility of the proposals on the table with EU law, Varga said.

At the same time, he added, Hungary agrees with the need to find a global solution concerning the taxation of the digital economy within the framework of the Organisation for Economic Cooperation and Development (OECD).

Hungary’s government is prepared to support a solution based on a broad compromise that avoids double taxation, the ministry said.