BUDAPEST (Reuters) - Budget airline Ryanair (LON:RYA) said on Wednesday it had appealed to the courts after Hungary fined it for passing on to customers the cost of a business tax meant to target excess profits.
Nationalist Prime Minister Viktor Orban's government in May announced the special tax targeting "extra profits" earned by major banks, energy companies and other firms, aiming to plug budget holes created by a spending spree that helped him gain re-election in April.
The new levy on the airline industry involves a tax worth 10 to 25 euros per passenger departing Hungary from July.
Ryanair said earlier this month that it would appeal against a 300 million forints ($726,000) fine following a consumer protection investigation.
Ryanair said it was "confident that EU Courts will validate its decision to pass on this retrospective tax to passengers."
Ryanair's chief executive Michael O'Leary said in an emailed statement that EU law guarantees airlines’ freedom to set prices and pass on retrospective taxes to consumers.
O'Leary went on to say that "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..."
Ryanair has previously called on Orban's government to scrap the new tax, saying the measure would damage Hungarian tourism and the economy.
Orban's taxes on what his government calls "extra" profits at banks, insurers, large retail chains, the energy industry, telecoms companies and airlines is reminiscent of the tax regime he used to fix the budget after he swept to power in 2010.
($1 = 413.3000 forints)