Hungarian foreign minister calls for a rethink on global corporate tax rate

FILE - This May 4, 2021 file photo shows the Treasury Building in Washington. The U.S. Treasury Department said Thursday, May 20, 2021 that it supports a global minimum corporate tax rate of at least 15% — below the 21% minimum it has been seeking to impose on the foreign profits of U.S.-based companies. (AP Photo/Patrick Semansky, file)
By Dénes Albert
2 Min Read

Although a signatory of the agreement, Hungary remains skeptical about the benefits of a global minimum corporate tax rate, Minister of Foreign Affairs and Trade Péter Szijjártó told his U.S. counterpart Antony Blinken in a phone call on Wednesday.

“We are not at all enthusiastic about this idea, especially not in its current form, especially not in the current circumstances,” Szijjártó said about the discussion in a Facebook post.

“The European economy is facing very serious challenges due to the war, and in this situation the new tax burden on manufacturing companies could be fatal,” the Hungarian foreign minister wrote. “In the rest of the world, who knows when they will introduce it, if at all,” he added.

“Therefore, this decision would be yet another severe blow to European competitiveness, which would be better avoided,” Szijjártó said, revealing that the two sides had agreed to continue discussions this week.

Hungary announced last October that it will join the vast majority of countries that have agreed to apply a minimum global corporate tax rate of 15 percent proposed by the Organisation for Economic Co-operation and Development (OECD).

Hungary, along with fellow EU member state Ireland, was among the last of the signatories, but eventually it agreed to the tax after bargaining for a 10-year transition period.

“We have managed to make a breakthrough on the issue of the global minimum tax agreement, so Hungary can join in good heart,” Hungarian Finance Minister Mihály Varga said last October.

That, however, was before the war in Ukraine had such a severe impact on the pan-European economy.

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