Orban scuppers Macrons EU master plan as Hungary BLOCKS global tax deal with US

Viktor Orban ally slams EU oil embargo on Russia

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The French President was hoping to conclude the deal before the end of his country’s rotating presidency of the EU, but Hungarian Prime Minister Viktor Orban raised last-minute objections to the plans saying he was “not enthusiastic” about the proposal.

Brussels wants to impose a global minimum tax rate of 15 percent in agreement with the US.

Until last week, Poland was considered the only country in the EU to be opposed to the plans, but as Warsaw is now signalling its willingness to agree to the measure, Budapest is delaying the move further.

The Polish finance ministry said: “The passing of the directive is an ongoing process and Poland hopes for it to be successfully completed shortly.

“Our constant approach aimed at retaining the link between the pillars at the EU level is strictly a matter of the international tax reform.

“It is not affected by any other EU issues and we are not in any way undermining the OECD project.”

But Hungary’s foreign minister, Péter Szijjártó, wrote on Facebook on Wednesday morning that adding an extra tax burden at a time of “very serious challenges during the war” could be “fatal” for manufacturing companies.

After a phone call with US Secretary of State Antony Blinken, he said: “We’re not keen on this idea at all, especially not in its current form or under the current circumstances.

“The war is putting the European economy under strain, and especially since efforts are underway to introduce them in Europe at the start of next year, while who knows when they’ll be introduced in the rest of the world, if at all.”

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He warned that the global minimum profit tax could be “the final blow” for producers amid the challenges the war in Ukraine poses to the European economy.

He pointed to efforts to introduce the minimum tax in Europe from the beginning of 2023, “while the rollout in the rest of the world would happen who knows when, if ever”.

“This would be a low blow to European competitiveness, one that would be better to avoid,” he added.

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Earlier in the week, Erik Bánki, an MP of governing Fidesz, said parliament’s Economy Committee would draft a resolution opposing an EU directive on introducing the global minimum corporate profit tax.

The so-called OECD tax deal would seek to introduce a 15 percent minimum corporate tax rate and it is one of the pillars of President Macron’s agenda for his country’s EU presidency this year.

President Macron has been one of the EU’s keenest promulgators of the regulation.

The deal was hailed by the French leader as “historic” and a “real step forward for tax justice” and could deliver an annual boost to French public finances of up to €4 billion.

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