Hungarians could pay for Google, Facebook advertisements

Banking

Hungarian advertisers might be required to pay taxes for advertisements appearing on Facebook, Google and Youtube, under a proposal that is expected to come before Paliament Friday and would amend the controversial new advertisng tax.

When lawmaker László L. Simon of the governing Fidesz party submitted the advertisement revenue tax bill, he hinted that Google, Facebook and Youtube make huge revenue on advertisements posted by Hungarian individuals. Simon implied that these giants should also contribute to the “public burden” of Hungary, but those companies do not pay taxes in Hungary, and the law passed in mid-June did not mention them.

An amendment to the law, which closes a tax loophole that RTL Klub could have used to reduce its advertising tax burden and is expected to be approved on Friday, now slaps a tax on ads placed with global websites, according to reports. The amendment states that if the media outlet does not pay taxes here, advertisers would be required to pay 20% after every advertisement.

According to Zsolt Urbán, chairman of the Hungarian Advertising Association, the measures are problematic, as it will be almost impossible to keep track of who has paid the 20% tax on Google of Facebook advertisements, and the Hungarian Tax Authority (NAV) might face a difficult time dealing with the taxes.

If the amendment is approved, advertisements posted on Hungarian online media would also be taxed.

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