The European Parliament – Photo: wikipedia

Fidesz MEP rejects call to ‘rethink’ stance on global minimum tax

The European Union's planned global minimum tax on large corporations has not been developed fully, and has not been implemented by international partners in Asia or America, and so would bring a competitive disadvantage to Europe, Fidesz MEP Eniko Gyori told a plenary session of the European Parliament.

Gyori spoke after European Commissioner for the Economy Paolo Gentiloni called on Hungary to “rethink” its stance on the tax.

Noting that the concept was unanimously accepted last October, Gentiloni said the 15 percent minimum tax would be an important economic and social measure. Hungary, the only member state to later oppose the tax, is citing economic fallout from the war in Ukraine, he said.

At the same time, revenues from the tax could be used to protect EU citizens against the war’s impact, he said.

Large corporations should pay taxes where they are turning a profit, he said.

In response, Gyori said Hungary was exercising its right to stop a process it sees as detrimental to Europe.

“Let us not become our own enemy — there is a war raging, the priority should be damage control,” she said.

The  global minimum tax is a two-pillar package, she said. The first pillar, the taxation of large digital companies, has stalled, although the two should be finished together, she said. Meanwhile, the tax has not been introduced by the EU’s partners in Asia or America, and so would mean a competitive disadvantage to European companies, she said.

The proposal needs further work, in the interest of Europe’s unity and competitiveness, she added.

Csaba Molnar, an MEP of the opposition Democratic Coalition, accused the Hungarian government of attempting to thwart the “fair taxation of the richest multinational companies”. He insisted that Prime Minister Viktor Orban was “using the veto for blackmail, trusting that he will gain access to EU funds without having to restore the rule of law and curbing corruption in Hungary,” he said.

Tamas Deutsch, head of the Fidesz delegation in the EP, said even the concept of the global minimum tax and the fact that it had been included on the agenda were “scandalous”, arguing it meant that the EP wanted to strip member states of their right to represent their own national interests.

Deutsch said that by “questioning” member states’ right to represent their national positions, the EP was launching a “serious attack” not only on member states’ right to enforce their interests but also on the bloc’s basic treaties. This, he insisted, meant that the legislative body was going against the principle of the rule of law while “constantly holding member states to account” over respect for the rule of law.

Socialist Party MEP Istvan Ujhelyi said in a statement that the global minimum tax could lead to muntinational corporations having to bear tax burdens that are proportional to their revenues in times of crisis. It would also prevent the biggest corporations from registering themselves in tax havens and unlawfully taking their profits out of the countries they do business in, he added.

Ujhelyi said the Hungarian government was backtracking on its position on the global minimum tax after several important ministers had backed the measure earlier. And though Fidesz’s MEPs abstained from voting on it, Gyorgy Holvenyi of the co-ruling Christian Democrats voted to support an EP resolution on the tax last month, he added.

Ujhelyi said this proved that the government was not opposing the tax to protect Hungary’s national interests, but rather to “follow Poland’s example” by trying to find an issue to use as blackmail in its talks on the EU funds being withheld from Hungary.

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