Hungary doesn't join minimum corporate tax OECD statement


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Hungary was among nine countries that did not join a statement backing the introduction of a global minimum corporate tax rate at a meeting of members of the OECD Inclusive Framework on July 1, state secretary for tax affairs Norbert Izer told MTI.

At the meeting, 130 Inclusive Framework members joined the "Statement on a Two–Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy". The first pillar would re-allocate some taxing rights over multinationals from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there. The second pillar would introduce a 15% minimum corporate profit tax.

Izer said the nine dissenting countries were "really just the tip of the iceberg".

"Rather than speaking about the uniform support of 130 countries, it would be more accurate to say that there were that many that supported the proposal or that were not clearly against it," he added.

"The international community strives, to an extraordinary degree, to seek consensus, which is why many countries waited until the last minute to join the agreement with various reservations in the hope that by October, when the next OECD meeting takes place, there will be a chance for issues that matter to them to be addressed," Izer said. 

He said Hungary "fully backs" the first pillar of the OECD proposal, although noting that it now applies to a broader range of companies than the originally targeted digital multinationals. Hungary "is a partner" on the second pillar of the agreement, too, "as long as it exclusively addresses artificial tax avoidance structures", he added.

"In the case of profits generated from real economic activities, the situation is different: then taxation is the sovereign right of every country, and no international organization may intervene," Izer said.

Among the other Inclusive Framework members that did not join the statement on July 1 were European Union members Ireland and Estonia.

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