From impasse to unanimity: understanding Hungary’s position on pillar 2

Abstract

For decades, global minimum taxation was off the table, but a recent proposal out of the OECD has it back under consideration. It is now up to the Finance Ministers of the Member States to adopt the Pillar Two proposal in the Ecofin. The proposed reform of international taxation is transposed in an EU directive. In this blog, I discuss the recent impasse the EU countries have reached due to Hungary’s veto and evaluate the objectives of the minimum tax policy against Hungary’s national interests. I conclude with a debate about whether and how the directive will move forward unanimously, or, alternatively, by the procedure for Enhanced Cooperation. The procedure allows the Member States to establish common rules for a smaller group of participants.