The EU regulation of a new generation of market players, digital financial services providers or so-called fin-tech companies, and the deepening of the Economic and Monetary Union (EMU) were also on the agenda of the informal ECOFIN session held in Tallinn, Estonia, Minister of State for Financial Affairs Ágnes Hornung said. On Saturday, a proposal on the taxation of Internet-services giants was discussed, she added.

At the working lunch of EU finance ministers, documents on the further expansion of the GMU were debated. As Ágnes Hornung noted concerning GMU regulations, these were restricted to the euro-zone but decision-making was the responsibility of the EU27. With regard to the Commission’s proposal the standpoint of Hungary was that the main topic of the European semester should remain economic policy and social policy proposals should be treated separately.

A keynote study on the expansion of fintech companies on financial markets and its consequences as well as an analysis by the Bruegel Institute were discussed, among others, at the informal ECOFIN session on Friday afternoon.

Fintech companies and their services have changed the operation of the financial sector as we know it. This process, however, has several potential pitfalls, the uncovering and resolving of which are to pose a tremendous challenge in the near future, the Minister of State stressed. Regulation must create a level playing field and leave sufficient room for competition but it must also have adequate consumer and data protection clauses, she pointed out.

At the Saturday session, a proposal by the Estonian presidency of the EU on the taxation of international digital services giants was scheduled to be discussed. Last year, Hungary has already tabled a draft on the introduction of a respective withholding tax and a model for the coordinated collection of these taxes, the Minister of State said. Member states agreed that digital taxation required a global solution, as this was the only way to ensure that on-line companies paid the same taxes as enterprises physically present in a country.

(Ministry for National Economy)