ADVERTISEMENT

Hungary doesn't join minimum corporate tax OECD statement

World

Image by Shutterstock.com

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.

ADVERTISEMENT

Purchasing Managers' Index rises Analysis

Purchasing Managers' Index rises

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

The strongest move - Morgan Stanley Hungary head and Chess F... Podcasts

The strongest move - Morgan Stanley Hungary head and Chess F...

New Jewish cultural hub opens in Budapest City

New Jewish cultural hub opens in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.