Hungary and Ireland expressed strong opposition on Thursday (January 4) against any effort to harmonise corporate and other tax rules across the European Union, saying such moves would damage competition in the single market.
Hungary, which relies heavily on foreign investment to power its economy, runs the EU’s lowest corporate tax rate at 9 percent, while Ireland’s 12.5 percent rate is also among the lowest in the 28-member bloc.
There have been attempts to harmonise the corporate tax base within the euro zone, of which Hungary is not a member, but those efforts have struggled to make headway as opponents say that would be a foot in the door leading to harmonised tax rates.
Varadkar said the two leaders agreed that the European economy was strongest if there is competition among member states.
The EU’s tax commissioner Pierre Moscovici said in November that the Commission was considering using extraordinary powers to strip EU states of their veto power on tax matters to break resistance over blocked legislation.
Orban and Polish Prime Minsiter Mateusz Morawiecki demanded a bigger say in the bloc’s future after a meeting on Wednesday (January 3), with Orban saying trade between countries in central Europe and Germany was bigger than between Germany and France.
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