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Finance-sector tax likely in breach of EU law

The Fidesz government’s finance sector tax, in particular recent revisions giving certain insurers in Hungary exemption could be in breach of EU competition laws, tax experts asked by the portal said.

Fidesz MP Antal Rogán submitted an amendment proposal that would have lifted the obligation from insurers founded after July 1, 2007. This relieves firms such as Wabard and CIG Pannónia, the latter having very strong ties to Fidesz, of the tax.

The experts stated that the EU will likely consider the amendment as illicit state subsidization, since according to calculations it would spare CIG HUF 400 million and Wabard HUF 300 million of payable taxes.

If Brussels should find that the changes are indeed in breach of EU competition principles, the companies involved would be required to pay the tax with interests. (