June was the month in which the EU planned to approve the 15% tax on multinationals. But not. At the last Ecofin meeting, the finance ministers confirmed the Polish veto, which actually depended on the European Commission unlocking its recovery fund –36,000 million euros–, which it ended up doing on the condition that Poland address the political decolonization of the judicial system.
Poland got that release and then lifted the veto on the new taxation. But, now, the veto comes from its old ally, Hungary, which also has its recovery plan blocked due to its authoritarian drift, which has even led the European Commission to activate the conditionality mechanism due to the corruption detected in the management of the European funds.
Orbán’s veto of the tax comes after the confrontation with the 26 over the embargo on Russian oil and for removing the Russian patriarch, Kiril, from the sanctioned list.
“Hungary cannot support the proposal for a directive for a global minimum rate at this time, the work is not ready, I think we have to continue with the efforts to find a solution”, said the Minister of Economy in the public debate of the Ecofin Hungarian, Mihály Varga.
Thus, Orbán has finally fulfilled his threat to veto the minimum 15% tax on multinational companies in line with the agreement reached at the international level in the OECD last summer.
The OECD proposal last October consisted of two pillars.
The first pillar establishes that 25% of the profits of companies with a turnover of more than 20,000 million dollars (about 19,000 million euros) and a profitability of more than 10% would have to pay taxes in the countries where they have their business. exercise. According to the OECD, pillar one would affect nearly the 100 largest multinationals – Google, Facebook, technology, etc. – and would generate some 125,000 million dollars (119,000 million euros) in annual income to the affected countries and territories.
The second pillar, which was being debated this Friday at Ecofin, introduces a global minimum rate of 15%, which would apply to companies with revenues of more than 750 million euros. The EU Fiscal Observatory calculated that the EU countries could enter some 80,000 million euros per year with the reform.