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EC starts infringement procedure against Hungary over telecoms tax

The European Commission said that it launched an infringement procedure against Hungary over a new “special tax” imposed on the telecommunications sector last October.

“On the basis of information received from the Hungarian authorities, the Commission is concerned that the special tax on telecom operators is levied to cover costs other than administrative and regulatory costs related to the telecoms sector and is therefore incompatible with EU telecom rules,” the Commission said.

The Hungarian government has two months to reply and if the Commission's concerns are not allayed, then a formal request will be issued for Hungary to ensure that it complies with EU law on taxation, the statement added.

Péter Szijjártó, the Prime Minister's spokesman, said that the special tax was in compliance with EU laws in every respect. The shared distribution of burdens is a European value and the special tax has been introduced in keeping with this principle, he added.

Szijjártó said Hungary had not yet received the official letter requesting information but as soon as it arrives, the government would immediate prepare an answer and send it within the deadline.

The telco tax was one of three “crisis taxes”, also levied on energy companies and retailers, introduced last year.