In 2010, legislation came into force allowing Hungarian households to distil for personal consumption the equivalent of 50 litres of pálinka containing 86% alcohol tax-free every year.

Later, lawmakers raised the excise tax on pálinka distilled for private consumption by contract distillers to 50%, while introducing a flat tax of just 1,000 forints per year for Hungarians who distil pálinka at home, to comply with an EU directive on reductions on the normal excise rate for such distillates.

In spite of the efforts to comply with the directive, the EC asked Hungary to take further measures.

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