Hungarian Government’s latest attempt to tax Google, Facebook & Co.

Posted in: Hungarian Jun 10 2016

Hungarian Government has already been levying a tax on advertisers and advertising service providers, so Google, Facebook and other online ad giants should have already checked in to the Hungarian tax authorities and should be sending the 5.3 percent of their net income to Hungary whenever their Hungarian advertisers spend their ad budget to reach a ”predominantly Hungarian” audience on a ”predominantly Hungarian” website, just as every other (Hungarian) company who generates more annual income than 100 million forints (cca. €312.067) this way, such as the Hungarian TV channels.

One previous attempt to get some compensation even when a foreign company such as Google and Facebook is not willing to pay for the Hungarian Government was the following: If a business entity spends more than 2.5 million Forints on advertising at a company which is not paying the advertisement tax, then the business entity itself should pay a 20% tax in addition to the money spent for the amount that surpasses the monthly 2.5 million HUF budget. The problem with this approach was obviously that the small businesses never paid tax for spending their ad budgets at foreign companies, as they rarely pay millions for online advertising.

So as to the government could get hold on that 5,3 percent of an annual income estimated at the heights of HUF, from 2017 it will radically increase fines up to HUF (cca. €9.620.000) for those companies who have not registered themselves as advertising service providers, or just simply don’t care about paying taxes for the Hungarian State for their online advertising-related activities. It still remains a bit questionable though how Hungarian authorities could effectively force to pay an Irish company taxes for them.

Read more about the Hungarian Google Tax: