Hungary launches tax probe against RTL Klub

By bne IntelliNews June 26, 2014

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Hungary has launched a tax probe into the country's largest commercial TV channel, RTL Klub Hungary, the economy minister announced on June 25. The move only raises concern that the government is gunning for media critics, following the recent introduction of an advertising tax.

Mihaly Varga told a press conference he has asked Hungary's Tax and Customs Authority (NAV) to launch an investigation into RTL Klub without delay. The minister said he wants to determine if the station made a "fictive transaction... over recent years" in order to evade tax, including the controversial advertising tax, reports MTI.

RTL Klub's coverage of the government has become increasingly critical in recent weeks, leading to suspicions that this is behind ruling party Fidesz officials' calls for the tax office to launch an investigation. Antal Rogan, head of the parliamentary group for Fidesz, on June 23 in the lower house accused the channel of using "accounting tricks and ways to evade taxes," and demanded stiff action.

The previous week, Janos Lazar, head of the prime minister's office, claimed: "the management of commercial channel RTL believes they stand above the law and do not need to pay tax." RTL Klub, alongside other independent media in Hungary, has pledged a legal fight against the new advertising tax that was fast-tracked through parliament last week.

A staunch critic of the Fidesz government, the broadcaster is widely believed to be a major target of the tax. Introduced in a bill in early June, the levy essentially has RTL Klub as the only company included in the 40% top bracket, as bne reported earlier this month.

Protest against the tax has been voiced across Hungary's media industry, with companies now due to pay out millions of forints by August. Opponents insist the legislation is an attempt to curb media freedom.

Many claim the tax is structured to favour government-friendly media. Some analysts suggest RTL Klub will pay 60% of all state revenue stemming from the tax. Part of the Luxembourg-based RTL Group, 75% of which is held by Germany's, the station has upped its criticism of the Fidesz administration and Prime Minister Viktor Orban through the month. 

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