Updated at: 2142 PST, Monday, January 03, 2011
 BRUSSELS: The European Commission on Monday said it was investigating whether a Hungarian "crisis" tax upsetting major European firms was in compliance with rules set by the bloc -- currently chaired by Budapest.
The Commission, which has been asked by 13 leading European firms to sanction Hungary over the tax, launched an inquiry on the matter on December 20, its spokesman Olivier Bailly said.
"As soon as we've reached conclusions, which is far from being the case ... we will take a decision," the Commission spokesman added.
Hungary on October 18 passed additional taxes on the telecommunications, energy and retail sectors for a three-year period as a way of helping replenish state coffers and bring down the public deficit.
The taxes, which represent a levy on a company's annual revenues, are expected to raise 582 million euros (797 million dollars) each year.
But in a five-page letter sent on December 15 to European Commission President Jose Manuel Barroso, the heads of 13 European firms accused Hungary, which on January 1 took over the EU rotating presidency, of imposing exceptional taxes.
Among them were energy groups including Germany's RWE and E.on, Czech firm CEZ and Austria's OMV, as well as Dutch financial groups ING and Aegon, French insurance giant AXA and Germany's Deutsche Telekom.
Bailly said the Commission on October 22 had sent a letter to the Hungarian authorities "to ask for more information on this new tax law."
Budapest sent a response on December 17.
"We are now looking into the complaint (from the 13 firms) ... and the Hungarian government's reply," he added.
"We don't have problems with budgetary and fiscal decisions taken by member states in order to consolidate and balance their budgets," he said.
But he added that there were "principles of equality regarding tax within community rules according to which it is not possible to tax operators of one sector more heavily than others."
The 13 firms urged the Commission to put pressure on Hungary to reverse its decision to impose "unjust financial millstones" which cost Deutsche Telekom about 100 million euros (134 million dollars) in extra taxes last year at its Hungarian subsidiary Magyar Telekom.
Germany's Economy Minister Rainer Bruederle has also slammed the tax, telling the Sueddeutsche Zeitung newspaper in an interview appearing Monday: "Taxes that predominantly affect foreign companies are fundamentally a problem for the internal European market."
He said he had raised the issue with Budapest and that it would be on the agenda for a meeting with his Hungarian counterpart Tamas Fellegi later this month. |
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