The EU is urging Hungary to comply with the 15 percent corporate tax

The EU has urged Hungary to accept a minimum corporate tax of 15 percent as it fights with the country over pandemic funding and aid to Ukraine.

Economy Commissioner Paolo Gentiloni urged Budapest to “deliver on the commitment” it has made to its global and EU partners.

Hungary signed the tax into law at the Organization for Economic Co-operation and Development – known as “Pillar 2” – last year and vetoed it at the last minute earlier this year as the EU negotiated a law that would apply it bloc-wide.

“Hungary signed the global agreement on ‘Pillar 2’ and supported the idea of ​​introducing this agreement into the European framework,” Mr Gentiloni told reporters in Brussels on Thursday afternoon.

“Their opposition came only recently, so my very clear request is to stick to the commitment that has been made at global level – the signing of the OECD agreement with the other 135 countries – and at some point also at European level .

“So I hope we get back to that.”

Mr Gentiloni’s comments come after a turbulent week in which Hungary blocked promised €18 billion in EU aid to Ukraine, forcing its European partners to bypass the country to get the money to Kyiv by January.

Hungary is fighting with the EU over the release of more than €10 billion in EU regional and pandemic funds that the Commission has held back over rule of law and fraud issues.

MEPs have said Hungary is effectively “blackmailing” the EU to release the funds.

Hungary has previously halted EU sanctions against Russia and blocked the 15 percent tax.

Prime Minister Viktor Orban said last week that the deal between the OECD (and the EU) was “a job-killing tax hike” that would “wipe out tens of thousands of jobs”.

Hungary has used a low 9 percent tax rate to attract firms to settle there.

Tax laws require the unanimous support of all 27 EU countries.

Finance Minister Paschal Donohoe has repeatedly said the bloc should not try to bypass Hungary to secure a tax deal, although the Netherlands and several other countries want to go ahead with 26.

This week, EU finance ministers bought more time by asking the Commission to reassess Hungary’s progress on judicial and anti-fraud reforms.

But they also linked Hungary’s aid payments to its support for Ukraine and the 15 percent tax.

The commission’s reassessment is due on Friday, with EU countries confident they can bring Hungary into line before Christmas and avoid the dispute marring a summit of leaders next week. The EU is urging Hungary to comply with the 15 percent corporate tax

Fry Electronics Team

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