Parliament approves advertisement tax

Banking

The Hungarian Parliament approved the controversial tax on advertisement revenues Wednesday, despite protests from media on all sides of the political spectrum, as well as two demonstrations outside the Parliament building last week.

Parliament approved the tax bill in a fast-track procedure, which limits debate time, with 144 votes in favor and 30 against. A late amendment says that this year's advertising tax bill can be reduced by 50% for media firms reporting losses from earlier years, in corporate tax or personal income tax. Opposition parties said the amendment clearly favors television broadcaster TV2, which is said to be friendly to the ruling party, Fidesz.

The graduated tax applies to media companies, publishers, outdoor advertisement firms and online advertisements. Media outlets making between HUF 500 mln and HUF 5 bln must pay 1% of all their advertising revenue in tax. Those in the highest bracket, with HUF 20 bln in advertising revenue, must pay 40% tax.

The law is to take effect in 31 days, following its publication, and affected companies will have to pay taxes after their revenues from this year on.

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