EU efforts to agree a 15pc minimum tax on large firms have hit another roadblock as Hungary came out against the move this week.
rance has been trying to broker an EU compromise for months, but has failed repeatedly due to Polish opposition.
After Poland softened its stance this week, Hungarian foreign minister Peter Szijjarto came out to say that he was “not keen on this idea at all” because it would deal a “deep blow” to European firms.
“We’re not keen on this idea at all, especially not in its current form or under the current circumstances,” he wrote on Facebook on Wednesday, after a call with US secretary of state Antony Blinken.
Placing new tax burdens on European companies “could be fatal”, he said, given that Russia’s war in Ukraine has led to “serious challenges” for the European economy.
He said he was against the EU moving ahead of other jurisdictions because “in the rest of the world, who knows when it will be introduced, if at all”.
Mr Szijjarto and Mr Blinken that they would hold further consultations later this week.
Last October, almost 140 countries – including Ireland – agreed on the outlines of a 15pc minimum tax and a deal that would see the largest multinationals pay some tax in countries where they make sales, rather than where they are based.
The European Commission tabled a draft law to implement the 15pc rate last December. It requires the unanimous approval of all 27 EU finance ministers.
The Commission will table a law on the other part of the deal once the details are finalised by the Organisation for Economic Cooperation and Development (OECD), which drafted and negotiated both agreements last year.
In March, Hungary said it “did not oppose” an EU deal, as long as a link was drawn between the two “pillars” of the deal – the 15pc minimum rate, which covers companies with global annual revenues above €750m and the shift in taxing rights, which covers a much smaller group of firms with annual revenues of at least €20bn and profit margins over 10pc.
Poland, which has been battling EU officials and courts over judicial independence and for approval of its €35.4bn pandemic recovery plan, was the EU’s last holdout on a deal.
Since the Commission approved its recovery funding earlier this month, the country’s position had softened.
EU finance ministers meet in Luxembourg on Friday, where they “may” discuss the tax, an official statement said.
Ministers from the 19 countries using the euro meet today to discuss the economic situation and Croatia’s adoption of the euro, which is expected in January 2023.