Magyar Telekom to Pay HUF 25 Bn 'Extra Profit' Tax

Hungary’s leading telecommunications service provider Magyar Telekom has announced that under Government Decree 197/2022. (VI.4.) on the extra profit taxes, the expected magnitude of supplementary telecommunication tax payable by Magyar Telekom Group for the year 2022 is approximately HUF 25 billion.

The company statement highlights that on June 4, 2022 the Hungarian government issued a decree imposing new taxes on a number of industries, including telecommunications. The supplementary telecommunication tax is levied on the actual business year’s annual net sales of electronic telecommunication services as defined by the law on local taxes and is payable for the years 2022 and 2023.

Based on the decree, the estimated magnitude of the supplementary telecommunication tax payable by Magyar Telekom Group for the year 2022 is approximately HUF 25 billion. It is expected that the tax will be accounted as an operating expense thus will proportionally lower the Company’s EBITDA AL and Free cashflow for 2022.

As a consequence, and also taking into account the underlying business tendencies, the Company now expects EBITDA AL and Free cashflow to show moderate decline for 2022 compared to the previous year. Other elements of the Company’s 2022 public targets are kept unchanged, according to the statement published on the website of the Budapest Stock Exchange.