Ireland, Hungary Oppose EU Tax Harmonization Plans

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Leaders of Hungary and Ireland have strongly opposed the proposed plans towards additional tax harmonization within the European Union.

The leaders took this position when the Irish Prime Minister, Leo Varadkar, visited his counterpart in Hungary, Viktor Orban.

A news report by Reuters indicated that during a joint news conference organized by the leaders after their meeting, Orban said that his government “would not like to see any regulation in the EU, which would bind Hungary’s hands in terms of tax policy, be it corporate tax, or any other tax.”

While describing taxation as “an important component of competition”, Orban pointed out however that both of them “do not consider tax harmonization a desired direction.”

Supporting Orban’s views, Varadkar explained that the two governments believed that “we should continue to have competition among [EU] member states in terms of tax policy.”

Varadkar explained further that both Ireland and Hungary strongly felt that “countries should set their own taxation rates.” This should apply for both corporation and income taxes.

Despite the seeming opposition to the fiscal reform proposal by Ireland and Hungary, the European Commission is continuing to push for the adoption of its common consolidated corporation tax proposal.

The President of the Commission, Jean-Claude Juncker, has suggested that the EU should move from a system of unanimous voting to qualified majority voting on key tax policy issues.

However, Ireland’s Finance Minister, Paschal Donohoe, had, in the past, made it clear that the Irish Government “will not support any change to existing EU voting rights on corporation tax.”

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