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Mar 09, 2016

European Commission’s Country Report Acknowledges Achievements of Hungarian Economic Policy

At the latest ECOFIN session, EU finance ministers discussed the recently published Country Reports of the European Commission. Outlining Hungary’s standpoint, Minister for National Economy Mihály Varga said that compared to the previous report of 2015, the study is more balanced, and it paints a much more favourable picture of the country’s economic situation. In addition, finance ministers agreed that the number of data exchanged automatically between tax authorities must be increased.

Country Reports aim – under the European Semester -- to provide a verified study of the economic status of EU member states and, on the basis of available data, to identify future challenges. By the middle of the year, the EC formulates country recommendations for member states building upon Country Reports. Following the session, Mihály Varga said that this Report of Hungary is fair, it acknowledges the progress made in improving general economic conditions as well as falling government budget deficit and state debt levels. The document also applauds the phasing-out of household forex loans, he added. This may guarantee that well-founded and practicable recommendations will be formulated for Hungary at the end of May.

The ministers also discussed and endorsed the proposal to extend the kinds of data automatically exchangeable by tax authorities. This measure aims to combat cross-border tax avoidance and aggressive tax planning. Thanks to the change, countries’ tax authorities can obtain sufficient information on the structure, transfer pricing and inner transfers of conglomerates’ affiliated companies. According to the proposal, detailed data must only be provided for the tax authority at the headquarters of the parent company. After that, these data are forwarded to other tax authorities. Only taxpayers with a consolidated turnover of EUR 750 million and more are subject to data exchange obligation.

At the ECOFIN session, the European Commission and the Dutch Presidency presented the current status of forming a banking union. Hungary has been following closely the implementation of banking union, as a member state outside the Euro-zone.