A global minimum tax for businesses would hurt competitiveness, says Hungary’s ruling party

Competitiveness would suffer if the European Union adopts a directive on a global minimum tax for large companies, the chairman of the Hungarian parliament’s economic committee said on Monday.

The commission will submit a proposal calling on the Hungarian parliament to reject the directive, said Erik Banki of the ruling Fidesz. The move is in response to “wartime inflation” and the economic crisis resulting from the Russian-Ukrainian war, Banki added.

The OECD earlier launched global taxation of digital multinational corporations, he noted.

“Because these companies avoid paying taxes,” the initiative was met with almost unanimous approval, he said.

The tax was to be introduced from 2023, but should be delayed for at least a year, he added.

Meanwhile, another initiative proposed a global tax for all large companies, which would have a huge impact on foreign companies operating in Hungary, he said.

The details of the measure must be carefully ironed out before the EU directive is adopted to avoid double taxation, which could confuse investors, he warned.

Passing the EU directive ahead of the OECD regulation would hurt Hungary’s and the EU’s competitiveness and shorten the preparation time for affected companies, Banki said. Parliament’s economic committee will meet on Monday afternoon to discuss the draft proposal, he said.

Source: MTI

Laura T. Thrasher