Resumen de Hungary: : The new tax on the media and advertising sector
In summer 2014, the legislator in Hungary introduced a special tax. This special tax could significantly reshape the entire domestic media market. The advertising tax law, which entered into effect in mid-July, imposes a new levy on income from advertising. The range of subjects, who must pay this tax, is rather broadly defined. The new special tax has elicited protest by all market players. In addition to electronic, print and online press products, it also extends tax liability on outdoor and internet advertising. Pursuant to the legislative intent, the tax needs to be paid not only by companies that are established in Hungary, but also by other corporations that provide services in Hungarian language, but pay their taxes abroad. The applicable rate of the special tax rises progressively. Below an advertising income of 0.5 billion HUF (circa 1,6 million Euros), the prevailing rate is 0%. Then it rises to 1% for income over 0.5 billion, but less than 5 billion. Above 5 billion, the rate is 10% and increases by another 10% for each additional 5 billion, up to a maximum rate of 40%, which kicks in at an advertising income of 20 billion or more.
