Hungary strikes back over the cancelled agreement by the USA

The Hungarian parliament’s Committee on Economics modified its agenda tomorrow after the USA announced on Friday evening that it terminated the double taxation avoidance agreement with Hungary signed 43 years ago. The committee is lead by Fidesz MP, Erik Bánki. Based on the committee’s new schedule, they will discuss a motion about foreign pressure going against Hungary’s economic interests.

Washington acted unilaterally

The new motion is probably linked with the United States’ latest decision regarding the termination of a decades-old taxation agreement, Hungarian media outlets say. Thus, the conflict between Budapest and Washington over the global minimum tax seems to worsen.

As we reported yesterday, the United States terminated its double taxation avoidance agreement with Hungary, signed 43 years ago. The minister of Foreign Affairs and Trade, Péter Szijjártó, said that the reason for this step was clear: Hungary is opposed to the introduction of the global minimum corporate tax rate and the resulting tax increases. Before, Hungary vetoed the European Union’s plan on introducing a 15 percent global minimum tax. Government officials said such a tax would decrease Hungary’s competitiveness since that rate is only seven percent currently in the country. If they voted for it, jobs would disappear, and Hungarian entrepreneurs would not be able to expand, they added.

Finance minister Mihály Varga added that the United States wanted to “pressure” Hungary into changing its position on the global minimum corporate tax by terminating its double taxation avoidance agreement with the country.

Read also: US terminates double taxation avoidance agreement with Hungary!

New motion on the schedule

The prime minister’s chief of staff, Gergely Gulyás, went even further today. According to portfolio.hu, he called that a “petty step by a superpower” in an interview today. He added that the USA and Hungary signed a new agreement avoiding double taxation in 2010. That could have solved all problems of the American party, but the Congress has not accepted it yet.

Since the original agreement’s deadline is 2024 January, the Americans would like Hungary to sign the global minimum tax agreement by then, Gulyás cleared.

Then they would probably ratify the 2010 double taxation agreement.

Probably because of Washington’s attitude, the Hungarian parliament’s Committee on Economics modified its Monday session’s agenda on Saturday afternoon. The new schedule contains a motion rejecting the exertion of political pressure going against Hungary’s economic interests.

Read also The USA seeks to ‘pressure’ Hungary, says finance minister

Source: portfolio.hu, DNH

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6 Comments

Dishevelment / Disarray : says:

10/07/2022 at 18:31

And the WINNER was ?
Know who the “little” huf I have at this time and disappearing fast – will be on.
Hungary – does appear to be under “growing” external pressure.
Why is our “Brand” name “tarnished and damaged” – as it appears to be ?
Where are our FRIENDS – to lend a hand, in this mounting, growing difficult and challenging times ?
Maybe – we NEED a Massive directional change – in the image we are sending to the world.
We continue on – in this “pressure cooker” atmosphere – there is going to be an almighty, sooner than later – an Economic & Financial “eruption” – that will be Ruinous.
The Realist says:

10/07/2022 at 19:18

It’s ironic that the US loves to complain about China and the pressure it exerts on sampler countries. It is the US who acts arrogantly by trying to push smaller countries around. Unlike China, the US has illegal invaded countries that want against its interest.
TM says:

11/07/2022 at 12:06

Anyone that is paying attention knows the US is now being run by clowns and they would like nothing better than to crush Obran and let the Soros hands return their influence. Lucky this is not the US- they are using the FBI , CIA , DOJ including the military to crush anyone that is not going along including parents who are unhappy with failing school system run by Unions.
Uncle Sam says:

11/07/2022 at 12:08

The question being asked in the US is ‘where is Hungary?’ Most people have never heard of it.
Norbert says:

11/07/2022 at 12:53

Uh. We were supposed to get a new double tax treaty for YEARS (but it was stuck mostly due to a certain Republican US politicians – Rand Paul for one). Treaties usually address matters such as limiting or eliminating double taxation, tax avoidance and lower withholding taxes. That the US would now decide to outright terminate the Treaty is hardly surprising given the Hungarian position on the Global Minimum Tax.

US Treasury: “The benefits are no longer reciprocal – with a significant loss of potential revenues to the United States and little in return for U.S. business and investment in Hungary” – and potentially the increased risk of treaty shopping (treaty abuse, tax avoidance) because of the rate arbitrage (Hungary’s 9% versus US’ 21% corporate income tax rate).

Good luck with our Politicians’ “Republican Friends”. “America First!”, remember? Guessing no Plan B, as usual … Other than hoping that “probably” the 2010 Double Tax Treaty will be ratified (officially labelling the US vengeful and petty should no doubt help)
mariavontheresa says:

11/07/2022 at 21:40

Is the US Marxist, leftist government scared that a small country with relatively small population will steal its industries? Bullies like the Biden Government are detrimental to world peace.