Digital taxation: yes; tax increase on Brussels’ command: no

The European Parliament has adopted its opinion on the digital taxation of multinational companies, which calls for the urgent adoption of a new digital levy at EU level. The financial resources collected from this new tax should be used for the sake of the reimbursement of the 750 billion EUR recovery loan package. In the plenary debate Fidesz MEP Enikő Győri emphasized the importance of giant digital tech companies being compelled to pay their due tax contributions. At the same time, she called on the European Parliament to abstain from generating unnecessary conflicts with its resolutions to the detriment of ongoing international negotiations, and to refrain from creating tensions in the relations among Member States by presenting proposals that could undermine the competitiveness of European economies.

MEP Enikő Győri called for the participation of large digital companies in common tax burden sharing, i.e. that giant companies like Google, Facebook, Amazon and others offering digital services should be obliged by law to pay tax contributions in the countries where they exert their activities. ”I am convinced it is our common interest to find a global solution to the problem of tax avoidance, including the issue of digital taxation, that enjoys the full support of all OECD countries. As of now, we are in the midst of an international negotiation process, so we should avoid any steps that could jeopardize its success”, declared the Hungarian MEP. She added however that “The EP resolution only generates unnecessary conflicts, putting at risk the promising compromise already emerging with our non-European partners. Should this compromise solution fail, then this would have for consequence that the BigTech companies, mostly based outside the EU, would once again get away without paying taxes. If the US were to stay out of the OECD agreement, then Europe would find itself in a very detrimental situation, with its main competitors reaping all the benefits”

”In order for us to recover from the present crisis, it is imperative to improve our competitiveness. In line with this objective, it is our common interest not to hinder, but on the contrary, to fully support those Member States that have shown their ability, due to efforts made in whitening the economy, to reduce to a reasonable level the tax burden on citizens and businesses in the recent years. For incomprehensible reasons, the EP report suggests exactly the opposite, and proposes to introduce qualified majority voting in taxation issues, that would clearly go against the interest of Member States having recently introduced lower tax rates supporting the competitiveness of their respective economies. For this reason, the Fidesz delegation to the EP has voted against the report”, pointed out MEP Enikő Győri after the vote.

Background: In the framework of the Organization for Economic Cooperation and Development (OECD), international negotiations are in progress with the aim of concluding a global agreement implementing minimum tax rules worldwide, including for giant digital companies. As of present, these large companies pay unproportionally low tax contribution, and in many cases, they even succeed in avoiding paying any taxes. The main objective of the negotiations consists in enforcing the principle of fair and equitable taxation, i.e. to ensure that no large company will be able in the future to avoid paying taxes. These efforts enjoy the full support of the EU as well as of the Member States, including Hungary. Negotiations are expected to be completed by the end of June 2021.