New doubts about the corporate tax agreement as Hungary rejects the minimum rate of 15 percent

The EU’s efforts to agree a minimum tax of 15 percent for big companies hit another hurdle when Hungary opposed the move this week.

France has been trying to negotiate an EU compromise for months, but repeatedly fails due to Polish resistance.

After Poland softened its stance this week, Hungarian Foreign Minister Peter Szijjarto said he was “not at all enthusiastic about this idea” because it would deal a “major blow” to European firms.

“We are not at all enthusiastic about this idea, especially not in its current form or under the current circumstances,” he wrote on Facebook on Wednesday after a phone call with US Secretary of State Antony Blinken.

New tax burdens for European companies “could be fatal”, he said, as Russia’s war in Ukraine has led to “serious challenges” for the European economy.

He said he was against the EU being ahead of other jurisdictions because “who knows when it will be introduced in the rest of the world, if ever”.

Mr Szijjarto and Mr Blinken that they will hold further consultations later this week.

Last October, nearly 140 countries – including Ireland – agreed on the outlines of a 15 percent minimum tax and a deal that would see the largest multinationals pay part of the taxes in the countries where they sell, not where they are resident.

Last December, the European Commission presented a draft law introducing the 15 percent rate. It requires the unanimous approval of all 27 EU finance ministers.

The Commission will table legislation on the other part of the deal once the details are finalized by the Organization for Economic Co-operation and Development (OECD), which drafted and negotiated both deals last year.

In March, Hungary said it was “not opposed” to an EU deal as long as there was a link between the deal’s two “pillars” — the 15 percent minimum rate that covers companies with global annual sales of over €750 million. and the shift in rights taxation, which covers a much smaller group of companies with annual sales of at least €20 billion and profit margins of over 10 percent.

Poland, which has been fighting with EU officials and courts over judicial independence and the approval of its €35.4 billion

The country’s position had softened since the commission approved its recovery funding earlier this month.

EU finance ministers are meeting in Luxembourg on Friday, where they “may” discuss the tax, an official statement said.

Ministers from the 19 countries using the euro are meeting today to discuss the economic situation and Croatia’s adoption of the euro, which is expected in January 2023.