19 Jan

Deputy Prime Minister Mihály Varga represented Hungary at the first ECOFIN meeting of the year on the 18th of January. The directive on the global minimum tax and the implementation of the Recovery and Resilience Facility were the two main issues discussed.

Regarding the global minimum tax the Minister explained that we are still analysing the proposal, especially how the taxation of multinational enterprise-group-members and large-scale purely domestic groups operating in Hungary will be affected. We consider the Presidency’s intention to finalise the Directive in the first semester and to start applying the rules as of 1 January 2023 is too ambitious. The complexity of the matter requires Member States to have sufficient time to analyse and implement a directive. Taxpayers also need sufficient time to be able to establish new compliance procedures and prepare for the application of the new rules. Furthermore the Minister recalled that Pillar 2 was agreed as part of a large-scale package, including also Pillar 1. Therefore both pillars should be treated together, and developments on Pillar 2 should be parallel to the implementation of Pillar 1.

Concerning the Recovery and Resilience Facility he reminded the Commission that at the time of the creation of the RRF our common understanding was that no one in the EU should be left behind in order to swiftly overcome the crisis. Now after 2 years we see that major EU economies with GDP/capita well above the EU average all received their share. Recovery is already underway in most countries. Meanwhile our well-designed programme has not yet been adopted. So far Hungary has been simply deprived from the dedicated allocation.This unfair treatment would contradict the concept of cohesion and the need for economic convergence. Therefore the minister urged the Commission to find an early solution to this problem.