Hungary strikes back over the cancelled agreement by the USA
The Hungarian parliament’s Committee on Economics modified its agenda tomorrow after the USA announced on Friday evening that it terminated the double taxation avoidance agreement with Hungary signed 43 years ago. The committee is lead by Fidesz MP, Erik Bánki. Based on the committee’s new schedule, they will discuss a motion about foreign pressure going against Hungary’s economic interests.
Washington acted unilaterally
The new motion is probably linked with the United States’ latest decision regarding the termination of a decades-old taxation agreement, Hungarian media outlets say. Thus, the conflict between Budapest and Washington over the global minimum tax seems to worsen.
As we reported yesterday, the United States terminated its double taxation avoidance agreement with Hungary, signed 43 years ago. The minister of Foreign Affairs and Trade, Péter Szijjártó, said that the reason for this step was clear: Hungary is opposed to the introduction of the global minimum corporate tax rate and the resulting tax increases. Before, Hungary vetoed the European Union’s plan on introducing a 15 percent global minimum tax. Government officials said such a tax would decrease Hungary’s competitiveness since that rate is only seven percent currently in the country. If they voted for it, jobs would disappear, and Hungarian entrepreneurs would not be able to expand, they added.
Finance minister Mihály Varga added that the United States wanted to “pressure” Hungary into changing its position on the global minimum corporate tax by terminating its double taxation avoidance agreement with the country.
New motion on the schedule
The prime minister’s chief of staff, Gergely Gulyás, went even further today. According to portfolio.hu, he called that a “petty step by a superpower” in an interview today. He added that the USA and Hungary signed a new agreement avoiding double taxation in 2010. That could have solved all problems of the American party, but the Congress has not accepted it yet.
Since the original agreement’s deadline is 2024 January, the Americans would like Hungary to sign the global minimum tax agreement by then, Gulyás cleared.
Then they would probably ratify the 2010 double taxation agreement.
Probably because of Washington’s attitude, the Hungarian parliament’s Committee on Economics modified its Monday session’s agenda on Saturday afternoon. The new schedule contains a motion rejecting the exertion of political pressure going against Hungary’s economic interests.
Source: portfolio.hu, DNH