Ryanair, Hungary’s no. 1 airline, confirmed this morning (24 Aug) that it has appealed the baseless fine first announced by the Hungarian Justice Minister, yet allegedly imposed by the Hungarian Consumer Protection Agency (CPA) on 8 August last.
Excess profits tax is idiotic
Last June, the Hungarian government imposed an “excess profits” tax on the airline industry despite the fact that the airlines in Hungary are still reporting record losses, not “excess profits”. The Hungarian government also attempted to unlawfully limit the right of airlines to pass on this unjustified retrospective tax to passengers. The Hungarian government claims that airlines must absorb retrospective taxes and incur “excess losses”, and that Ryanair’s decision to pass this retrospective tax on to passengers was unlawful. These claims are without foundation.
EU law – which still binds Hungary – allows EU airlines the freedom to set airfares and pass on taxes to consumers without any interference from national governments.
Ryanair has now appealed the unjustified fine imposed by the Hungarian government and is confident that EU Courts will validate its decision to pass on this retrospective tax to passengers.
The fact that this baseless fine was announced by the Hungarian Justice Minister on her Facebook page, even before Ryanair received any notification from the Hungarian CPA, shows that this was a politically motivated fine from an Agency which clearly lacks any independence or autonomy from the Hungarian government.
Ryanair CEO: an “excess profits” tax to the loss-making airline sector in Hungary is inexplicable
Ryanair’s CEO, Michael O’Leary said:
“The only thing more idiotic than the Hungarian government’s decision to impose an “excess profits” tax on the loss-making airline industry is the Hungarian Consumer Protection Agency’s decision to impose this completely baseless fine, and then notify its Justice Minister before notifying Ryanair. We have now appealed this baseless fine which we will ultimately overturn before EU Courts as EU law guarantees airlines’ freedom to set prices and pass on retrospective taxes to consumers.
The Hungarian government and its Consumer Agency is bound by these EU laws. Applying an “excess profits” tax to the loss-making airline sector in Hungary is inexplicable, and only succeeds in making flying to/from Hungary more expensive and less competitive compared to other Central European airports who
have lower costs and no idiotic “excess profits” taxes. This stupid tax has already caused Hungary to lose routes and flights this Autumn to lower cost neighbouring EU countries.”
Read alsoReaders’ letters from Norway – Wizzair left us stranded
Source: Ryanair press release
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5 Comments
I have no doubt in my mind that Ryanair will win the case and in so doing teach the Hungarian Government a valuable lesson namely that it must act within EU laws, laws passed by the European Parliament MEP’s – which include 24 Hungarian MEP’s.
This is a very good example why you should avoid doing any business in Hungary. They change the tax in seconds (like KATA, new taxes). Funny how the tax (VAT) on building a new house is 5% instead of 27% on almost everything else including water, electricity and gas.
Hungary continues to DISGRACE it-self & citizens – in legal matters refered in this subject.
The on-going DAMAGE this present Government builds, just not with the European Union, but as refered by Anonymous “broadsheet” with companies & businesses – APPALLING.
The “brand name” Hungary – shattered if not all but DESTROYED by this Orban led Government of Hungary, that the WORST is still to come, from this “styled” acted and played out Dictatorial Government, at present under the leadership of the Prime Minister of Hungary -Victor Orban.
@Anonymous, what is strange to me is that there is any VAT on new builds. I am used to the UK system: New Build is zero-rated, which means that a VAT registered builder or subcontractor must zero-rate their work and not charge VAT on any labour-only or supply and fix contracts.
Henry, I didn’t know we are comparing the UK to Hungary. But if we are why don’t you tell us what is the VAT on food in the UK? it is ZERO!
And here you know the VAT on food. Even the most basic food like bread has 18% VAT but most food is 27%.