BUDAPEST: The Hungarian parliament has approved an increase in the advertisement tax rate from 5.3 percent to 7.5 percent while appearing to overcome illegal state aid objections of the European Commission and continuing to shield smaller media companies from the tax.
The bill, which the Hungarian parliament approved May 16, maintains a 100 million forint ($360,000) revenue threshold at which the advertisement tax—7.5 percent as of July 1, 2017—kicks in.
Luxembourg-based RTL Group, which in Hungary operates two commercial television channels and six cable channels, is one of the largest foreign media companies to be affected by the tax, which is expected to be in place for about four years.
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The legislation explicitly says that any tax advantage companies below the 100 million forint threshold are to receive falls within the European Union’s “de minimis” regulation, which holds that state support doesn’t violate EU state aid rules provided it remains below 200,000 euros ($222,000) over a three-year period.
Also, instead of trying to recover any undue tax advantage companies below the 100 million forint threshold may have received since 2014, when the advertisement tax was first introduced, the bill says that taxpayers will receive a refund of taxes already paid.