Hungary Opts Out Of EU Competitiveness Pact

Hungary is to opt out of the proposed EU competitiveness pact because of its opposition to the proposed adoption of a common consolidated corporate tax base.

Euro-zone leaders agreed the competitiveness pact to increase market confidence as they seek to end the euro debt crisis. EU member states outside the euro-zone, such as Hungary, are allowed to opt out of the pact. The common consolidated corporate tax base is an important, but controversial part of this pact.

In addition to unifying the rules of calculating the corporate income tax base, the proposed Directive on the common consolidated corporate tax base would allow cross-border consolidation of profits and losses and eliminate the need to apply transfer pricing legislation for intra-group transactions within the EU. Corporate tax rates would remain in the competence of each Member State and thus rest unharmonised.