Philip Morris funnels billions in Hungarian profits to Switzerland despite sales decline
Philip Morris International (PMI) extracts billions in profits from its Hungarian subsidiary despite declining sales, funneling the full amount to its Swiss parent company. The Hungarian unit of the tobacco giant saw revenue fall, yet all profits—totaling billions of forints—were transferred to Switzerland, according to financial reports cited by *HVG* .
The company’s performance in Hungary reflects broader trends in PMI’s global strategy, where profit repatriation to low-tax jurisdictions remains a key financial tactic. While sales of traditional cigarettes and heated tobacco products like IQOS declined, the subsidiary’s profitability remained intact, underscoring the firm’s ability to maintain margins even amid market contraction. No specific figures for the profit transfer were disclosed in the report, but the practice aligns with PMI’s long-standing tax optimization policies.
The development comes as governments across Europe tighten scrutiny on multinational corporations’ profit-shifting mechanisms. Hungary, like other EU member states, has faced pressure to close loopholes that allow companies to minimize tax liabilities through intra-group transactions. However, PMI’s operations in the country continue to generate substantial returns for its Swiss headquarters, where corporate tax rates are significantly lower than in Hungary.
Analysts note that such profit transfers can strain local subsidiaries, potentially limiting reinvestment in domestic markets. The Hungarian case mirrors similar patterns observed in other Central and Eastern European countries, where foreign-owned firms often prioritize shareholder returns over local economic contributions. PMI has not commented on the specifics of the financial flows.
- hvg.hu
- digi24
- aktuality.sk
- il sole 24 ore
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