French supermarket chain Auchan wants a refund of more than €2m (US$2.4m) it paid in local tax under a law the company says does not conform to European Union rules, according to the AFX news agency which cited a report in daily Magyar Nemzet.

Auchan objects to Hungary's 2% local business tax, which companies pay to municipalities and is based on their revenue and not profit.

The French group argued that there is only one EU-sanctioned revenue-based tax, which is the value added tax that also applies in Hungary.

"We told the Budapest municipality that if the EU deems the local business tax is illegal, we will ask for a refund," Auchan spokeswoman Katalin Gillemot said.

Auchan currently has nine supermarkets in Hungary and plans to open another 15 stores by 2010.

Hungary's Socialist Prime Minister Ferenc Gyurcsany has said he wants to eliminate the local business tax by 2008.