European Commission issues a letter of formal notice to Hungary regarding its telecommunication tax – againJanuary 31, 2013
On 24 January 2013, the European Commission (EC) decided to send a letter of formal notice to Hungary, which is the first stage of the pre-litigation infringement procedure, under article 258 of the Treaty on the Functioning of the EU (TFEU).
With the letter of formal notice, Hungary is given an opportunity to submit its observations, within two months, on the compliance of its Law on Telecommunication Tax with the relevant EU law provisions.
Under the current rules of the telecommunication tax, Hungary imposes a tax of two Hungarian forints per minute started on the phone or message (sms and mms) sent.
As the first reaction from the Hungarian Government, in its press release of 24 January 2013, the Ministry for National Economy (Ministry) highlighted that the telecommunication tax falls out of the scope of the relevant EU Directive (Directive 2002/20 of 7 March 2002 on the authorization of electronic communications networks and services (Authorisation Directive), as it regulates the imposition of “fees” and “charges” (not taxes) on the telecommunication sector. In the Ministry’s view, the telecommunication tax differs from the fees and charges of the Authorisation Directive, not only in its name, but in its legal character as well.
This is the second time within a year that Hungary has been asked to amend a tax in the telecommunication sector.
The first time, Hungary was required by the EC to abolish its crisis tax on telecommunication operators as “EU telecoms rules allow sector-specific charges only to cover the specific costs of regulating the sector.”
Consequently, although the crisis tax has been repealed with effect from 1 January 2013, Hungary has been referred to the Court of Justice of the European Union (CJEU).
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