Tállai emphasized that Hungary would not relinquish one of the most important elements of its economic sovereignty, the right to set taxes. According to him, the idea of a global minimum tax is in the interests of several high-taxing economic powers, because they were disadvantaged by international tax competition.
Hungary will not agree to the introduction of a global minimum corporate tax rate, Deputy Finance Minister András Tállai told Hungarian newspaper Magyar Nemzet on May 25.
Last week, the US Treasury revealed that it has told the Steering Group of the OECD Inclusive Framework on BEPS that the global minimum tax rate should be at least 15 percent (as opposed to a 21% rate as was initially proposed). During meetings held with the Steering Group, the US Treasury expressed its belief that “the international tax architecture must be stabilized, that the global playing field must be fair, and that we must create an environment in which countries work together to maintain our tax bases and ensure the global tax system is equitable.”
The Treasury said: “It is imperative to work multilaterally to end the pressures of corporate tax competition and corporate tax base erosion.”
Commenting shortly after the US’ revised proposal, Tállai told Magyar Nemzet that Hungary “simply can’t support a tax increase, even if the idea has influential supporters.”
Tállai emphasized that Hungary would not relinquish one of the most important elements of its economic sovereignty, the right to set taxes. According to him, the idea of a global minimum tax is in the interests of several high-taxing economic powers, because they were disadvantaged by international tax competition.
“The Hungarian government, as always, is striving for a good relationship with the American leadership, but Hungarian interests cannot be preceded by the interests of another state,” Tállai told Magyar Nemzet.
While Germany and France have expressed full support to the US’ 15% global minimum tax rate, the idea has received stiff opposition from Ireland and the United Kingdom.
Ireland has no plans to increase its corporate tax rate, finance minister, Paschal Donohoe, said in an exclusive interview with Sky News.
“We do have really significant reservations regarding a global minimum effective tax rate status at such a level that it means only certain countries, and certain size economies can benefit from that base – we have a really significant concern about that,” he told Sky News.
For his part, UK Chancellor of the Exchequer, Rishi Sunak, has repeatedly stated that UK will support global minimum corporate tax rate plans only as a package towards international tax reform, and not as a standalone tax proposal.
The US’ proposal on global minimum corporate tax rate would likely be discussed at the upcoming virtual meeting of the G7 finance leaders.