EP adopts resolution in favour of global minimum corporate tax

In the resolution adopted with 450 votes in favour, 132 against and 55 abstentions, MEPs said “EU and global tax rules are outdated for dealing with the modern-day economy, since they allow for significant tax evasion and tax avoidance, lead to unacceptable competitive advantages for multinationals over SMEs, and undermine the EU single market”.

The resolution said Hungary’s “reported demands” had been largely taken into consideration in the international agreement, and urged the Commission and member states to “refrain from approving Hungary’s national recovery and resilience plan unless all the criteria are fully complied with”.

If Hungary maintains its veto, “MEPs say alternative options should be explored to honour the EU’s commitments, including the possible use of ‘enhanced cooperation'”, the European Parliament’s press statement said.

Eniko Gyori, an MEP of Hungary’s ruling Fidesz, rejected the resolution as “another attempt to pillory Hungary”. The national veto is a right of every member state, enshrined in the basic treaties, she said.

A hasty introduction of the global minimum tax would be a mistake in a war-time economic situation, and would put the EU at a serious competitive disadvantage, she said. Tax policy is an important national competency, and should remain in the nation states’ hands, she added.

Without a common fiscal policy, tax issues require unanimous decisions in the EU, she noted.

The global minimum tax would double the burdens on Hungarian companies and risk the country’s economic development, she said. “Hungary’s government stands for tax cuts. We have been pursuing that policy successfully for ten years,” she said.

Istvan Ujhelyi, an MEP for the opposition Socialists, cautioned that the Hungarian veto of the minimum tax could “backfire”. “Let us be clear, the veto is about blackmail and nothing else,” he said, insisting that Hungary was using the issue to force an access to EU resources.

“The blackmail tactics of the Fidesz government will be yet another reason [for the EU] to see the EU sanctions procedures against Hungary to the end,” which could cost Hungary “not only thousands of billions of EU funds but also Hungary’s voting rights in the EU,” he said.