Democracy Digest: Polish Government Takes Heart from Hungary’s Win at CJEU

The controversy over the tax has been rumbling on since June 2014, when the Hungarian parliament passed a law levying a progressive tax on advertising revenues of all media companies, including newspapers, magazines, radio stations, TV stations and billboard companies. Companies with annual ad revenues less than 500 million forints (1.4 million euros) were exempt, but those above the threshold were subject to a progressive tax ranging from 1 to 40 per cent, the top tier applying to ad revenues above 20 billion forints.

The law was seen as a direct attack on the largest commercial TV broadcaster, the German-owned RTL Hungary, as it was the only media company with ad revenues above the top tier. There was speculation the government wanted to force the Germans to sell RTL to some government-allied oligarch - as happened in the case of the other German-owned station, TV2, previously in the hands of ProSiebenSat1 but mysteriously handed over to some government crony, who promptly turned the formerly independent TV channel into a mouthpiece of the governing Fidesz party.

RTL Hungary reacted angrily to the tax and its programming took on a more government-critical tone, which fortuitously resulted in an increase of viewers. Parent company RTL Group also complained that despite having a 13.5 per cent share of the Hungarian media market, it was being forced to pay 80 per cent of all ad taxes. The debate reached the highest levels of politics; reportedly, in preparation for German Chancellor Angela Merkel's visit to Budapest in February 2015, Janos Lazar, the minister who headed up the Prime Minister's Office, held talks in Germany with RTL Group owner Bertelsmann. A compromise was reached whereby the progressive tax would be replaced with a 5.3 per cent flat...

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