The European Commission announced in a report on 26 July 2024 that it closed its in-depth investigation, which opened in March 2015, into the Hungarian advertisement tax.
In November 2016, the Commission found that the Hungarian advertisement tax introduced with the 2014 Advertisement Tax Act was in breach of EU State aid rules because of its progressive tax rates: companies with a low advertisement turnover were either fully exempted or taxed at 1 %, whereas companies with a high advertisement turnover were taxed at a higher progressive rate between 10% and 50%.
The Commission ordered Hungary to remove the discrimination between companies and to restore equal treatment in the market. When applicable, Hungary had to recover the advantage from each company.
In March 2021, the Court of Justice of the EU confirmed the judgment of the General Court, which found that the progressive tax rates on turnover did not entail a selective advantage to companies with low turnover over their competitors and annulled the 2016 Commission decision.
As a consequence of the judgment of the Court of Justice, the Commission’s investigation into the advertisement tax remained open. Pending the Court proceedings, in May 2017, Hungary retroactively repealed the advertisement tax introduced in 2014. As a result, the Commission’s investigation has become without object and the Commission therefore closed its investigation.
