Two countries oppose standardising tax rules across EU bloc

5 Jan 18

Hungary and Ireland have expressed opposition to harmonise tax rules across the European Union, saying it undermines competition within the single market. 

The prime ministers of both countries agreed that tax policy competition among member states was essential for a strong economy, at a joint news conference on Thursday.

“Taxation is an important component of competition,” the prime minister of Hungary Viktor Orban said.

“We would not like to see any regulation in the European Union which would tie the hands of Hungary in tax policy.”

His Irish counterpart Leo Varadkar also said the European economy was strongest when there was competition, including with regards to taxation.

He said: “We share a view, as governments, that we should continue to have competition among member states in terms of tax policy and reaffirmed our shared commitment to tax sovereignty.”

Both countries have some of the lowest corporate tax rates in the European Union. Ireland’s rate is at 12.5% while Hungary is the lowest in the EU at 9%.

The bloc has tried to harmonise the corporate tax base for member states as it tries to tackle tax avoidance and erosion.

A study last month found European countries were leading the ‘race to the bottom’ as corporate tax rates globally are heading towards zero by 2052.

The EU has published a blacklist of countries that meet the criteria of tax havens but it did not include member states.

NGOs have said that a number of EU countries would be blacklisted as tax havens if they were judged against the criteria, including Ireland, Luxembourg, the Netherlands and Malta. 

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