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Hungary flags objections to EU implementation of global minimum tax -Breaking


© Reuters. FILE PHOTO – Hungary’s Prime Minister Viktor Orban is in Brussels for the European Union Leaders Summit, where EU leaders try to reach an agreement on Russian oil sanctions as a response to Russia’s invasion in Ukraine. This was in Brussels, Belgium, May 30, 2022. REUTERS/Johanna Gero

Budapest (Reuters) – Hungary objected to Tuesday’s implementation of a global minimal tax within the European Union. It stated that it could only accept a proposal which does not adversely affect firms in Hungary and cited additional risks associated with the Ukraine war.

In October, nearly 140 countries agreed to a bilateral deal that was brokered in part by the Organisation for Economic Cooperation and Development. It included a 15% minimum tax on multinationals and a negotiated agreement for a second track.

It would be harder for Alphabet (NASDAQ;)’s Google, Amazon(NASDAQ:), and Meta (NASDAQ:), to avoid taxes by booking profits into low-tax jurisdictions.

Now, each country needs to agree on details for how the deal will work before the deadline set by OECD in 2023. France holds the EU’s six-month rotating presidency. France has demanded a speedy implementation within the bloc of 27 countries, as tax issues need unanimous approval.

Poland is still blocking any compromise and Hungary now has reservations.

The drafting of the detailed rules to the OECD proposal on a global minimum income tax isn’t progressing as expected,” the government in Hungary said in an emailed answer to Reuters questions Tuesday.

According to the government, the OECD proposal for taxing large digital companies was delayed. However, taxation would apply immediately to those who create jobs in Hungary.

The report stated, “In addition the competitiveness risk must be assessed due Russia-Ukraine War.”

Monday’s draft resolution was submitted by Fidesz, the ruling party of Prime Minister Viktor Orban. It states that parliament should reject the EU directives regarding the global minimum tax. This is due to war inflation and economic crises resulting from the war.