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Tax law passes; foreign firms to pay more

Banking

The Hungarian Parliament today approved the 2015 package of tax laws, including advertising, tobacco and "hypermarket" taxes that hit foreign companies harder than local ones.

The increase in the top bracket for the advertising tax, from 40%-50% will take the biggest toll on German-owned TV station RTL Klub, which is alone in the top bracket. RTL Klub has been giving more scrutiny to the government in its newscasts since the advertising tax was introduced earlier this year, and its viewer ratings have gone up.

The new tax on tobacco companies will also take a bigger cut from firms in the highest bracket, forcing Phillip Morris and British American Tobacco to pay tens of billions of forints in taxes while Hungarian firm Continental Tobacco Group would see an increase more in the order of tens of millions of forints.

The supervisory tax on hypermarkets would hit big foreign chains, like Tesco, with the highest tax of 6%, while CBA and Coop, which have a different company structure that treats each store as an individual business unit, might pay close to nothing.

Lawmakers passed the package with 128 in favor and 30 against, according to MTI.

New tax breaks are planned for couples who marry, under the proposal. Other provisions include tighter rules for VAT declarations and the right for towns and villages to raise taxes locally.

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