The European Commission on Wednesday said it formally requested that Hungary amend legislation on special taxes on retailers and telecommunications companies.
The Commission said "it considers these taxes to be discriminatory, as they fall disproportionately on non-Hungárian operators". "Due to the design of these tax rates and the structure of the two markets, domestic companies are in practice given preferential treatment and the taxes are mainly borne by foreign-owned companies," it explained.
The telco and retail "crisis taxes" are levied according to turnover, and many of Hungary's biggest retailers and telcos are foreign-owned.
Hungary has two months to bring its legislation in line with EU law as part of the second stage of the infringement procedure invovlgin the taxes. If it fails to comply, the EC may refer the case to the EU's Court of Justice.