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Google Tipped to Win Hungarian Tax Dispute


Sep. 17 2019, Updated 1:01 p.m. ET

Google looks poised to win a tax dispute with the Hungarian government, an advisor at Europe’s top court said on Thursday. Google disputed Hungary’s advertising revenue tax law, and the matter ended up at the European Court of Justice (or ECJ). Bloomberg reports that on Thursday, ECJ advocate general Juliane Kokott issued a non-binding opinion that faulted Hungary’s advertising revenue tax law.

The ECJ isn’t bound to follow what its advisors say. However, ECJ judges typically follow their opinions, as Reuters reported in April. Last week, for instance, the ECJ ruled that Google shouldn’t pay copyright fees to a group of German publishers. The ruling aligned with a court advisor opinion issued in December 2018.

Therefore, Google looks poised for victory in the ad revenue tax dispute. According to Hungary Today, the Hungarian tax authority fined Google about $3.3 million for failing to comply with its advertising revenue tax law.

Last year, Google generated over $116 billion from advertising, its main revenue source. Meanwhile, ad sales contributed 84% of Google parent Alphabet’s (GOOGL) total revenue. Google doesn’t disclose its advertising revenue by country.

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Big tech companies in European tax disputes

Google has faced other tax disputes in Europe. As we’ve discussed, Google is to pay $1.0 billion to settle a tax dispute with French authorities.

Apple is also in the middle of a tax dispute in Europe. The tech giant is fighting a European Commission claim that it received an illicit tax benefit from the Irish government. Amazon (AMZN) also faces an approximate $330 million tax charge from European authorities.

France hits big tech companies with digital tax

Some EU countries claim that big tech companies don’t pay their fair share of tax in the region, and have called for higher taxation of those companies. For example, France is set to levy 3.0% tax on digital revenue generated in its soil, affecting Google and Facebook (FB).

The US protested France’s digital tax, and Donald Trump threatened to tax French goods in retaliation. However, the two countries have now reportedly reached a deal over the digital tax dispute.


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