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EC withdraws telecom tax case against Hungary

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After a dispute going back to March 2011, the European Commission is withdrawing its case against Hungary in the European Court of Justice regarding the special telecommunications sector tax introduced in October 2010.

The EC formally turned to the court in October 2012, after sending a letter of formal notice based on a review of complaints by foreign companies from other European Union member states that the taxes were discriminatory. The tax was considered illegal by the EC “because EU telecoms rules allow sector-specific charges only to cover the specific costs of regulating the sector, and not to generate additional revenue for the central budget. Increasing the financial burden of telecoms operators could have an impact on consumers' bills, distort competition and impede investment in a sector expected to drive growth under the Digital Agenda.”  

The telecom tax calls for an increase of HUF 3 per SMS/MMS and per minute, while the cap for business accounts was increased from HUF 2,500 to HUF 5,000.

The EC also withdrew a case against Spain regarding a similar tax. The decision to withdraw the cases came after the ECJ had decided in favor of France in a similar case.

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