Tax Treaty Case Law around the Globe 2019

S. 3901. Introduction

The advertisement tax was introduced in Hungary in 2014 and since then it has become one of the most contested elements of the Hungarian tax system. During its rather short lifespan, it has been investigated by the Commission of the European Union (hereinafter: EU Commission) under the EU State aid rules, it is currently being challenged before the Court of Justice of the European Union (CJEU) on the grounds of infringement of the fundamental freedoms and it has been examined by the Hungarian Constitutional Court (hereinafter: Constitutional Court or Court) for its potential infringement of the non-discrimination clause of a double taxation convention. This paper deals only with the latter case, which concerned a procedural rule on the advertisement tax namely, the registration requirement and the penalty for failing to comply with such requirement applicable for foreign taxpayers.

As far as its substantive rules are concerned, the advertisement tax is levied on the annual net turnover of taxpayers generated from the publishing and broadcasting of advertisements in exchange for consideration, including the publishing on the internet, on media platforms and on traditio...