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The EU is easing sanctions on Hungary over its authoritarian move to approve aid to Ukraine and a 15% tax on multinational companies.

What does minimum corporate tax have to do with Hungarian cohesion funds? And what does Ukraine’s financial aid for 2023 have to do with Hungary’s covid recovery fund? EU procedures by which governments use their veto power to delay or speed up debate, or to bind files that are subject to blackmail.

Hungary has been delaying for months the approval of the minimum 15% corporate tax agreed in the OECD. Just as he has been demanding for weeks with Ukraine’s 18,000 million fund, to the point where the rest of the country pledged last Saturday to push ahead, with or without Orbán.

But finally, late this Monday night, the 27 ambassadors to the EU found a compromise, a landing point that mainly involves reducing the millions blocked from Hungary due to its authoritarian drift. Never mind that the European Commission reaffirmed late last week that the sanction should be 7,500 million, after EU finance ministers requested a new analysis last Tuesday. 27 decided that this blockade is not 65% of the three Cohesion Fund programs, but 55%, which is equivalent to approximately 6300 million.

It doesn’t matter because 27 preferred to give in to Orbán’s pulse in exchange for releasing the rest of the files. Among other things, they agreed to approve Hungary’s recovery plan, which is also subject to 27 key conditions for the rule of law, but which had to be approved by December 31 for Hungary to request 5,800 million in transfers.

Minimum tax for large companies

The 27 have reached an agreement to use at EU level the minimum tax component of the OECD’s international tax reform, known as Pillar 2.

“Effective application of the directive will limit the race in corporate tax rates,” the EU Council said: “The profits of large multinational and national groups or companies with a combined annual turnover of at least €750 million will be taxed. with a minimum rate of 15%. The new rules will reduce the risk of base erosion and profit shifting and ensure that the largest multinational groups pay an agreed global minimum rate of corporate tax.”

Source: El Diario





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