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Bill would reduce top rate for ad tax to 5.3%

Banking

Hungaryʼs government submitted a bill to Parliament on Friday that would apply a 5.3% rate for the advertising tax on a tax base of more than HUF 100 mln. A 0% rate would be applied to a tax base up to HUF 100 mln, according to the bill. 

The bill would also lower the rate applied to taxable parties that order publication of advertising from 20% to 5%. A draft of the bill was earlier published on the governmentʼs website. Even before the draft was published, Cabinet chief János Lázár said that the government would propose reducing the top rate of the progressive tax from 50% to 5.3%.

German-owned media company RTL Group earlier complained to Brussels that its business in Hungary was the only one in the top bracket, which put it in a "structurally loss-making position". The bill was drafted "in the interest of closing a legal dispute, while weighing the possible consequences of protracted litigation", according to its justification. If approved, the legislation would come into force 31 days after publication. Revenue from the ad tax is targeted at HUF 6.6 bln in this yearʼs budget.

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