Varga elaborates on RTL Klub investigation

Banking

In what would appear to be a targeted attack on a news station that recently vowed to be more critical of the government, Hungary’s Tax and Customs Authority (NAV) has been instructed to investigate a 2011 purchase by the country's biggest commercial TV channel, RTL Klub, Economic Minister Mihály Varga told Hungarian news agency MTI yesterday evening.

Varga told MTI that NAV is going to investigate RTL Klub's spending of HUF 23 bln to purchase two cable television companies from its German parent company, and then selling those companies at a loss following the prescribed one-year minimum period of ownership. Varga claims the action suggests a “fictive transaction”, designed to claim financial loss and thereby avoid paying corporate tax. While he promised an investigation, Varga also acknowledged that RTL Klub’s purchase might have conformed to Hungary’s tax laws.

RTL Klub and Hungary’s governing party, Fidesz, have been openly trading barbs since the government approved an advertising tax on June 11 that hits all commercial media outlets but leaves RTL Klub alone in the highest tax bracket.

RTL and other government critics say the tax was directed specifically as a way to hurt the largest media outlet in the country that is not at least indirectly influenced by Fidesz.

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