Hungary's Finance Minister Mihaly Varga told his EU counterparts today that his country could not support a reform of corporate taxation at this stage, effectively preventing a deal at EU level.
An EU agreement had been expected today after Poland dropped its opposition to setting a minimum corporate tax of 15% on big multinationals.
But Hungary today emerged as a last-minute hurdle and prevented a deal that requires the backing of all 27 EU states.
"Hungary cannot support the adoption of the global minimum tax directive at this stage," Varga told finance ministers in a public session of a meeting.
"The work is not ready. I think we have to continue the effort to find a solution," he added.
French Finance Minister Bruno Le Maire, who had made the tax deal a key goal of the six-month French presidency of the EU ending in two weeks, did not hide his disappointment but urged ministers to continue the work to strike a deal at a later stage.
At the meeting, Poland's finance minister Magdalena Rzeczkowska formally dropped its opposition to the deal.
The EU talks were meant to turn into law a global reform of corporate taxation, which was agreed last October by nearly 140 countries.
Le Maire said that all technical issues had been long solved, implying the stalemate was down to political concerns.
Poland and Hungary have been at odds with the European Commission, which has held up their receipt of Covid-19 recovery fund money over questions about their stance on the rule of law and other EU values.
Earlier in June, the Commission approved payments to Poland, whereas EU recovery funds for Hungary remain frozen.
The overhaul set global minimum corporate tax of 15% on big multinationals and gave other countries a bigger share of the tax take on the earnings of big US digital groups such as Apple and Alphabet's Google.
The reform was originally intended to be applied in 2023, but its implementation has now been effectively pushed back to 2024.
The Biden administration is also struggling to pass legislation that would implement the global minimum tax deal.