Politico has reported that the European Commission has started talks with EU Member States to override a Hungarian veto on the introduction of a 15% global minimum tax.
Unnamed officials from four Member States’ finance ministries confirmed the news to the political portal, adding that the Commission wants to secure the necessary support by the Economic and Financial Affairs Council meeting on October 4.
The Hungarian veto would be overridden by the Commission’s so-called enhanced cooperation procedure.
Under the procedure, at least nine EU Member States are allowed to establish enhanced integration or cooperation in a specific area within the EU, if it is established that the objectives of such cooperation cannot be achieved by the EU as a whole within a reasonable timeframe.
The procedure has been used several times in the EU, for example through the law applicable to divorce and the establishment of the European Public Prosecutor’s Office. It would be used now because normally the adoption of a law on minimum taxation would require the unanimous support of Member States.
The introduction of a global minimum tax of 15% was initiated by the United States. Hungary has opposed it basically from the outset and Poland does not support the idea either. Meanwhile, the US has recently released its anti-inflation package, which did not include the global minimum tax. Moreover, overseas, the mid-term elections in November are just around the corner, and depending on the outcome, Democratic President Joe Biden may well abandon the tax altogether.
The German government has also recently taken a strong stance in favor of a minimum tax, announcing that it is preparing to introduce it unilaterally. Some say this could send a political message to EU finance ministers, especially Hungary, who are meeting informally in Prague at the end of the week.
German State Secretary Sven Giegold wrote on Twitter recently that a global minimum tax should be introduced across the EU, but that it would need unanimous approval from Member States.
He said Germany can no longer stand by and watch billions of euros it is owed end up in tax havens because of Viktor Orbán’s veto.
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