Changes in the advertising tax: a new rate is introduced
On 27 May 2015 the draft legislation for amending the Advertisement Tax Act was given a green light: the amendment introduces a 5.3-percent tax rate above a HUF 100-million tax base. On 12 March 2015 the European Commission started a detailed examination of the Hungarian advertising law, because according to them there is a possibility that the act doesn’t comply with EU regulation and it distorts competition. The commission opined that only a single-rate tax system doesn’t distort the market. Based on this opinion the Hungarian government decided to make changes in the law and already for the whole of 2015 the amended version of the law applies. What is more, the HUF 100-million threshold applies for the full tax year that is in progress, which means that being exempt from the tax doesn’t depend on the size of the tax base built up after the draft amendment has been given a green light. The use of printed ads remains subject to the advertising tax and this means that one of the modifications’ biggest losers – with the tax rate increasing – is the retail sector, especially the chains which are publishing promotional leaflets.
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