FM Szijjártó: A compromise that does not harm Hungarian interests could come about with relation to the global minimum tax

“With relation to the introduction of a global minimum tax, the government will be exclusively supporting an agreement that does not damage Hungarian interests”, Minister of Foreign Affairs and Trade Péter Szijjártó stated at Wednesday’s session of the Organisation for Economic Co-operation and Development (OECD), the Ministry said in a statement.

According to the statement, Foreign Minister Szijjártó reported on the fact that this is a particularly sensitive point since Hungary has the lowest rates of personal income tax and corporation tax in Europe, and the introduction of flat-rate taxes have been one of the foundations for the success of Hungarian economic policy since 2010. "This is how we were able to exit Europe’s bench of disgrace and become one of Europe’s most rapidly growing economies," he said.

As he explained, the proposal before the OECD has two parts. The first is about taxing large digital corporations that perform their activities in a manner that is not tied to a specific location, with relation to with there is full agreement. “But the second part is more complicated, and concerns enterprises that perform true business activities," he said.

Foreign Minister Szijjártó pointed out that the rate of corporation tax of 9 percent that is currently in force in Hungary is the lowest in Europe. “This affords Hungary a major advantage from the perspective of promoting investment and job creation," he explained. “Accordingly, we are only able to accept a proposal that does not endanger this competitive advantage," he added.

According to the Minister, the Hungarian government has put forward a proposal for a ten-year transitional period and the determination of various exceptions, in addition to how workforce costs and the value of the instruments required for the functioning of enterprises should be taken into account when determining the minimum tax.

“If these are accepted by the other countries, a compromise could come about that on the one hand enables the introduction of the global minimum tax rate, while on the other hand not harming Hungarian interests and not endangering the Hungarian economy’s competitive advantage," he underlined.