In Britain, there is a big race for the prime ministership after Boris Johnson resigned in the summer. The two Tory candidates are former Chancellor of the Exchequer Rishi Sunak, and Secretary of State for Foreign, Commonwealth, and Development Affairs Liz Truss.
Until now, the British have also been in favor of a global minimum tax, and have been one of the main backers in the Organization for Economic Co-operation and Development (OECD) negotiations. However, the candidates in the election promise low taxes, which could easily turn the UK from the frontrunner of the global minimum tax into its opponent, Gergely Czoboly, tax expert at Jalsovszky Law Firm, pointed out to the Világgazdaság economic portal.
However, there are those who strongly oppose the new tax. Hungary, for example, has vetoed the introduction of a global minimum tax in the European Union, which has stalled negotiations. The EU is now reportedly considering how to introduce the tax without the Hungarians, but this could be illegal, according to the tax expert.
The Hungarian veto has not been without retaliation, as the US has terminated the double taxation treaty with Hungary as a result. This makes one wonder whether the Biden administration will apply similar political pressure on the UK.
The answer lies somewhere in the middle, the tax expert points out: on the one hand, the Americans cannot be expected to take such firm diplomatic action against the British. On the other hand,
According to Gergely Czoboly, the UK already has a more limited influence on the EU’s adoption of the global minimum tax, but the effects of the tax could be felt by UK firms even if the island nation does not introduce it. This also means that developments in the EU could easily force the UK to take action.