WASHINGTON: The US Treasury on Friday said it was moving to terminate a 1979 tax treaty with Hungary in the wake of Budapest’s decision to block the European Union’s implementation of a new, 15 per cent global minimum tax.

A Treasury spokesperson said that since Hungary lowered its corporate tax rate to 9pc - less than half the 21pc US rate - the tax treaty unilaterally benefits Hungary.

“The benefits are no longer reciprocal - with a significant loss of potential revenues to the United States and little in return for US business and investment in Hungary.” The timing of the termination following years of US concerns about the treaty suggests that Treasury is using it to try to pressure Hungarian Prime Minister Viktor Orban to agree to implement the 15pc global minimum tax agreed by nearly 140 countries.

Hungarian Fore­ign Minister Peter Szijjarto said that the global minimum tax would ruin Europe’s competitiveness and endanger jobs in Hungary.

Published in Dawn, July 10th, 2022