October 22, 2021

Beyond Going Long

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Hungary agrees to an international minimum corporate tax rate for business

Hungary agrees to an international minimum corporate tax rate for business

Hungary was the last member of the European Union to adopt this global treaty.

“A compromise has been reached so that we can join faithfully,” Finance Minister Mihaly Varga said. Hungary could levy global taxes through targeted settlement.

“Hungary’s position is absolutely consistent: we have made it clear that we will accept only global minimum taxes that do not increase taxes in Hungary, affect the competitive advantage of the Hungarian economy and protect the jobs of the Hungarian people,” he said.

The goal of tax reform is to end the practice of multinational corporations registering in countries with low tax rates in order to avoid high taxes.

The finance ministers of the Group of Seven rich nations agreed to a global cut of 15% in June. The corporate tax rate has been achieved in the Organization for Economic Co-operation and Development (OECD).

The tax rate was approved by the G20 in July.

The new tax rate will only apply to companies with annual revenues greater than $750 million. every year. Small businesses continue to pay 12.5 percent. Payment is requested.

On Friday, the Organization for Economic Co-operation and Development said 136 countries have already agreed to a 15 percent international minimum corporate tax rate for multinational companies.

“This is a great victory for effective and balanced diversity,” OECD Secretary-General Matthias Gormann said in a statement.

The fee was announced after it was approved by the Hungarian, Irish and Estonian governments. Pakistan, Nigeria, Kenya and Sri Lanka have not yet ratified.

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