European Union: Hungary blocks the adoption of a minimum tax on multinationals
Hungarian Prime Minister Viktor Orbán, during the presentation of the members of his new government to Parliament, in Budapest on Tuesday, May 24, 2022. AFP - ATTILA KISBENEDEK
Text by: RFI Follow
2 mins
Hungary says no to the draft directive for a minimum tax of 15% on the profits of multinationals.
A priority of the French Presidency of the Council of the European Union supported by all the other Member States.
Paris wanted the European Union to be the first legal entity to establish this directive.
The unanimous vote of the 27 member countries to ratify the project was scheduled for Friday with entry into force scheduled for December 31, 2023.
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Hungary, which had nevertheless given its agreement in April, decided at the last moment to play spoilsport, and vetoed it, citing the economic context linked to the war in Ukraine.
In the face of inflation, “
the introduction of a global minimum tax would cause serious damage to European economies
”, according to Hungarian Finance Minister Mihaly Varga.
An excuse ?
But for Brussels, the reason could be different.
The draft directive has already been blocked for several months by Poland, which has vetoed it.
For Brussels, it was a means of pressure while the European Commission accused it of shortcomings in terms of the independence of its justice.
The Commission has decided not to pay Poland the 34 billion euros in subsidies promised under the European recovery plan.
After the funds were released, Warsaw withdrew its veto.
It remains to be seen whether Budapest uses the same tactic.
Currently, Hungary is still waiting for the payment of just over 7 billion euros in subsidies that Brussels is keeping.
The commission criticizes Budapest for not sufficiently combating corruption in its country.
This tax would give reality to the OECD's global minimum tax project and is one of the pillars of the
agreement on the taxation of multinationals
voted in October 2021. Another pillar, which targets digital giants in particular, provides for the taxing companies where they make their profits to put an end to certain tax avoidance practices.
►Also read: Taxation of multinationals
: how do we live with this decision in Ireland
?
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