European Commercial Broadcasters Protest Hungarian Tax Crackdown

In a letter to the European Commission, the association of commercial television in Europe calls Hungary's new TV ad tax law “a clear interference with the democratic function of the media.”

The association of commercial television in Europe (ACT) has joined the growing chorus condemning controversial new tax legislation in Hungary targeting advertising on commercial television.

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In an open letter to Neelie Kroes, the commissioner for the digital agenda at the European Commission, ACT called the new law, which appears to single out regime-critical broadcaster RTL Klub as “ a clear interference with the democratic function of the media” and that it may represent “an attempt to encourage non-national owners to leave the Hungarian market, in clear contravention of the basic principles of the single European market.” RTL Klub, Hungary's largest commercial broadcaster, is controlled by RTL Group, a subsidiary of German media giant Bertelsmann.

In its letter, ACT called on Kroes, who has also sharply criticized the new law, to “make a clear and unambiguous statement that Europe cannot tolerate such a brutal assault on the core values of the European Union.”

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The new Hungarian law imposes punitive taxes on TV advertising revenues. RTL Klub, as the country's largest commercial network, is the only channel with revenues high enough to qualify for the new highest rate of tax: fully 40 percent of advertising revenues. RTL has said that it expects to pay $20 million (€15 million) in extra tax under the new regime, a bill that would essentially wipe out its operating profit in Hungary. The pan-European broadcaster said the Hungarian government has unfairly singled RTL out with the new legislation in punishment for RTL Klub's critical coverage of the government of Hungarian Prime Minister Viktor Orban and his right-wing Fidesz party since they took power in 2010.


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