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EUROPEAN COURT OKAYS HUNGARY ADVERTISEMENT TAX

 

The European Court of Justice annulled a European Commission decision which had declared the Hungarian advertisement tax incompatible with the European Union’s restrictions on state subsidies. According to the Luxembourg court’s ruling, the commission had no sufficient evidence that the Hungarian tax would selectively benefit taxpayers. In 2016, the commission said that the Hungarian law would provide an unjustified benefit to companies with low advertising revenues and ones that did not have profits in 2013, and stipulated that the Hungarian government should “restore equal treatment in the advertising market”. In its ruling, the court said companies with a higher turnover incurred lower production costs due to economies of scale, and could have a proportionally higher revenue and pay higher taxes. The ruling can be appealed.