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CJEU: Hungary to Lose Google Lawsuit?

MTI-Hungary Today 2019.09.13.

An advocate general of the Court of Justice of the European Union (CJEU) has said in an opinion that fines for non-compliance levied by Hungary’s National Tax and Customs Authority (NAV) on Google are disproportional, while also finding fault with limitations on Google’s chances for legal redress in the matter.

The opinion was issued in a response for a preliminary ruling from the Budapest Administrative and Labour Court involving an action brought by Google against the tax office fine.

By law, Hungary’s tax on advertisements applies to any person who publishes paid advertisements mainly in Hungarian or mainly on internet pages that are in Hungarian irrespective of place of residence. Non-resident taxpayers must register within 15 days of commencing activity subject to the tax or face a fine that may accrue, after continued non-compliance, up to 1 billion forints (EUR 3m), an amount as much as 2,000 times more than the penalty for companies established in Hungary.

Google, established in Ireland, failed to register with the Hungarian authorities and was subsequently fined an initial 10 million forints, followed by daily fines that were triple the earlier fine, bringing the total amount to the maximum 1 billion.

In the opinion, Advocate General Juliane Kokott said the manner in which the Hungarian law “imposes coercive measures” on companies established outside Hungary “constitutes an indirect restriction of the freedom to provide services which is not justified on account of its disproportionality”.

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The advocate general added that limitations of the possibility for Google’s legal redress in the matter “also constitute an unjustified restriction of the freedom to provide services”.

The opinion does not bind the court.

Featured photo illustration via pixabay.com

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