Hungary blocked an EU directive that would impose a 15% minimum tax on multinational corporations, arguing the levy would deal a “low blow” to European competitiveness and endanger jobs.
The tax reform is part of a global deal achieved last year at the Organisation for Economic Co-operation and Development (OECD). It has been endorsed by 136 countries representing more than 90% of global GDP.
The coronavirus pandemic injected momentum into the talks as governments around the world have scrambled for ways to boost their fiscal revenues and finance the costly recovery.
The reform is estimated to generate over €140 billion in additional income for public coffers every year.
The OECD deal needs to be transposed into EU law through a directive so as to become effective across the bloc. But tax matters are one of the few policy areas where unanimity is required, making it possible for a single country to paralyse the entire agreement.