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By Francesco Guarascio
LUXEMBOURG (Reuters) – Hungarian Finance Minister Mihaly Varga told his European counterparts on Friday that his country may simply not reform corporate tax at this stage, which would prevent an EU-wide deal.
An EU deal was expected on Friday after Poland withdrew its opposition to applying a 15% corporate minimum tax to giant multinationals, but Hungary emerged as a last-minute impediment and prevented a deal requiring the participation of all 27 EU states.
“Hungary cannot pass the global minimum tax directive at this stage,” Varga told finance ministers at a public consultation at a meeting.
He added: “The painting is ready. I think we want to continue the effort to find a solution. “
French Finance Minister Bruno Le Maire, who had made the tax deal a key target of France’s six-month EU presidency that will end in two weeks, made no secret of his sadness but suggested ministers continue to work towards a deal later.
At the meeting, Poland’s Finance Minister Magdalena Rzeczkowska withdrew her opposition to the deal.
The EU talks aimed to turn into law a comprehensive corporate tax reform, which was approved last October by nearly 140 countries.
The mayor said all the technical issues had been resolved a long time ago, implying that the standoff was due to political concerns.
Poland and Hungary disagree with the European Commission, which has been delayed in receiving cash from the COVID-19 recovery fund due to doubts about its position on the rule of law and EU values.
In early June, the Commission passed bills for Poland, while the EU’s recovery budget for Hungary remains frozen.
The reform established a global minimum corporate tax of 15 percent for large multinationals and gave other countries a higher percentage of the income tax on major U. S. virtual teams. U. S. companies such as Apple Inc and Alphabet Inc. ‘s Google
The reform was originally intended to be implemented in 2023, but its implementation was now postponed until 2024.
Biden’s management is also struggling to pass a law that would put the global minimum tax deal into effect.
(Reports through Francesco Guarascio @fraguarascio; more reporting through Leigh Thomas; Edited by William Maclean and Tothrough Chopra)