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CJEU advisor says Hungary ad tax complies with EU rules

EU

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A top adviser of the Court of Justice of the European Union (CJEU) on Thursday said Hungaryʼs progressive advertising tax does not violate EU rules on state aid, state news wire MTI reports.

Image by frantic00 / Shutterstock.com

Advocate General Juliane Kokott said in an opinion that state aid rules do not preclude taxation of turnover of businesses at a progressive rate and proposed the CJEU dismiss an appeal by the European Commission against a ruling by the General Court finding no evidence of selective advantage in the tax regime.

The Hungarian ad tax is paid on net turnover. It is set at 0% for a tax base under HUF 100 million and at 5.3% over that threshold.

The EC has argued that the tax grants smaller businesses, which are "taxed at too low a level", an impermissible advantage and thus constitutes state aid.

The advocate general drew the same conclusion for an ad tax in Poland that the EC has also contested. 

The opinion does not bind the court.

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