As Hungary blocks global tax deal, MEPs denounce national vetoes

• Hungary’s demands unfounded; Commission and member states must not give in to blackmail
• Global and EU tax rules not fit for modern-day economy, favouring tax avoidance and hurting SMEs
• Unanimity voting requires responsibility and reducing its use must be considered

MEPs criticize countries abusing their vetoes on tax matters and demand a relaunch of discussions to gradually introduce majority voting.

The resolution adopted on Wednesday with 450 votes in favour, 132 votes against and 55 abstentions, closes the debate which took place during June’s plenary part session.

It says that Hungary’s “reported demands” to lift its blocking of the international agreement on a minimum corporate tax rate for multinationals, “were already largely taken into account in the international agreement”, and calls on Hungary to “immediately end its blockage”. The resolution also urges the Commission and member states “not to engage in political bargaining” and to “refrain from approving Hungary’s national recovery and resilience plan unless all the criteria are fully complied with”. If Hungary persists with its veto, MEPs say alternative options should be explored to honour the EU’s commitments, including the possible use of ‘enhanced cooperation’.

The resolution also states that EU and global tax rules are outdated for dealing with the modern-day economy, since they allow for significant tax evasion and tax avoidance, lead to “unacceptable competitive advantages” for multinationals over SMEs, and undermine the EU single market.

MEPs remind member states that unanimity decision making in the EU requires a “very high level of responsibility, in line with the principle of sincere cooperation”, as set out in the EU Treaty. For the longer term, member states should consider the benefit of transitioning to qualified majority voting, and the Commission should relaunch the idea to gradually introduce majority voting on tax matters.

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