Minister Nagy points to need to weigh impact of global minimum tax on EU competitiveness

National Economy Minister Márton Nagy told journalists ahead of a meeting of his EU peers in Brussels on Tuesday that decision-makers needed to revisit the issue of the global minimum tax on big corporations in the context of the United States’ decision to withdraw from the OECD agreement.

Investigate the form of the global minimum tax

“We have to investigate whether in the present form of the global minimum tax is really valid for the future to preserve or strengthen the competitiveness of the European Union,” Nagy said. He added that the global minimum tax’s future was on the Ecofin meeting’s agenda. Nagy said the US decision to withdraw from the agreement on the global minimum tax could present problems for the EU because the step would benefit non-EU countries, even as the EU faces a “competitiveness crisis.” He added that the relocation of multinationals needed to be avoided.

Fielding questions on a recommendation that would allow exemptions for defence spending from excessive deficit procedures, Nagy said discussions were in the “initial phase”, with differences over what should be defined as defence expenditures and what should serve as the reference rate. He added that Hungary took the position that member states should be allowed to decide what constitutes defence spending, while others wanted to adopt the NATO definition. Details of the proposal are being hammered out and are expected to take shape in a package in the spring, he said.

As we wrote earlier, OECD acknowledges qualified status of Hungarian rules on global minimum tax.

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