In late October 2010 the Hungarian Government introduced a so-called crisis tax on firms in the energy and retail sectors as well as telecoms, to avoid imposing such costs on the public as it seeks to meet budget deficit targets. The amount of tax payable by the electronic communications service providers is progressive and depends on the revenue and the activity from which this revenue is generated. In the case of telecoms services no tax is payable after the revenue under HUF 100 million (EUR 370,000); 2.5% tax is payable after the revenue between HUF 100 million and 500 million (EUR 1.85 million); 4.5% tax is payable after the revenue between HUF 500 million and 5 billion (EUR 18.5 million); and 6.5% tax is payable after the revenues above HUF 5 billion. The tax is payable from 2010.
Market-leading Magyar Telekom (affiliate of Deutsche Telekom) has indicated that it faces a bill of HUF 27.5 billion (EUR 10.1 million) in extra tax this year, as the Government seeks to collect HUF 61 billion from the telecoms sector each year from 2010 to 2012.
The European Commission has announced that it is to investigate whether the crisis tax being imposed on the country's leading telecoms operators complies with European Union telecoms regulation. The Commission has highlighted that EU regulation permits such charges only when they cover "certain administrative and regulatory costs". It will also seek clarification that the charges are objective, transparent, and proportionate. The intervention of the Commission suggests that Hungary's affected operators may yet face a reprieve to some degree.