Hungary delivers fresh blow to Vestager’s ongoing tax crusade
Hungary has won a court fight with EU regulators over a tax on advertising, in another setback for Competition Commissioner Margrethe Vestager’s crusade against countries she says are taking advantage of state aid-rules to give select companies an unfair advantage over rivals.
Vestager’s officials at the European Commission failed to show that the Hungarian tax was discriminatory, the EU General Court, the bloc’s second-highest tribunal, ruled.
Several court tests for the EU regulator are due to come in the near future as judges start issuing decisions on the Dutch tax deal secured by Starbucks and weigh Apple’s fight against a massive back-tax repayment to Ireland.
The decision is another court loss for Vestager, the EU’s competition chief, who has led a crackdown on how governments choose to tax large businesses. Her targets have included several US companies, such as Google and Apple, prompting US president Donald Trump to say “she hates the United States.”
Hungarian prime minister Viktor Orban initially levied the ad tax in 2016 by slapping a rate of up to 50% of sales for the biggest networks, which RTL Klub, the country’s most-watched commercial TV channel, called a “brute attempt to ruin” one of the last independent media outlets. Following EU criticism, Hungary capped and gradually lowered the tax rate before pledging earlier this year to suspend it altogether through 2022.
“The commission will be studying the judgment carefully before deciding on any next steps,” EU spokesman Ricardo Cardoso said.
EU courts earlier this year overturned an order for Belgium to reclaim about €800m from 35 companies, including Anheuser-Busch InBev.
Other defeats include cases concerning Real Madrid’s allegedly unfair subsidies from a land deal with authorities in the Spanish soccer giant’s home town and a tax on the retail sector in Poland labelled as illegal state aid.The European Commission in November 2016 said the Hungarian law was illegal because of its progressive tax rates, which unfairly benefit some companies over others.
