Hungary and Ireland Reject EU Tax Harmonization Moves

February 15th, 2018

The leaders of Hungary and Ireland reject the ambition of harmonizing corporate and other tax regulations across the EU, because they believe that such a move would violate the competition in single market.

"We, Hungarians, believe taxation is an important component of competition. Lowering taxes is generally a good policy," Orban said. "We would not like to see any regulation in the European Union which would tie the hands of Hungary in tax policy."

Ireland's prime minister was just as firmly opposed.

"The European economy is strongest if there is competition among member states, for example competition when it comes to taxation," said Varadkar. "We share a view, as governments, that we should continue to have competition among members states in terms of tax policy and reaffirmed our shared commitment to tax sovereignty."

At present, 12.5% ​​corporate tax is imposed in Ireland, which is the lowest in the 28-member bloc. In Hungary, where the stimulating effect of foreign investors has a significant role, tax is currently 9%, which is the lowest in the EU. 

Previously, there have been attempts to harmonize corporate taxation within the European Union, however, it has stuck to resilient views that this would only be the first step towards full tax harmonization. 

The EU's tax commissioner Pierre Moscovici said in November that the Commission was considering using extraordinary powers to strip EU states of their veto power on tax matters to break resistance over blocked legislation.


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