Government welcomes the decision of the European Court of Justice confirming that the Hungarian retail tax did not constitute discrimination among different forms of retail organisations.

The Government welcomes the decision of the European Court of Justice confirming that the Hungarian retail tax did not constitute discrimination among different forms of retail organisations.

The European Court of Justice has come to a decision on the compatibility of the now expired retail tax with European Union law. In accordance with the ECJ’s decision, taxes like the Hungarian surtaxes on specific sectors do not contravene the EU ban on discrimination in general, and the principle of freedom of movement in particular. This means that the last remaining EU procedure investigating Hungarian sectoral surtaxes has been closed, with a successful outcome for Hungary.

The Government welcomes the ECJ’s decision because it reinforces the Hungarian standpoint according to which Hungarian sectoral surtaxes do not represent direct or indirect discrimination between various retail organisations, such as franchise networks and chain stores.

The ruling leaves open the question whether the rules on turnover consolidation stipulated by the law for linked enterprises may in fact contravene EU law in certain cases. The European Court of Justice has entrusted the decision on this issue to the Hungarian court. The Hungarian court must examine to what extent the regulations concerning linked enterprises have affected Hungarian businesses with their headquarters abroad.

Source: Ministry of National Economy