The EU threatened to sue Hungary because the tax was seen as discriminating in favour of domestic products such as pálinka and Unicum.

The government has not abandoned its stance, but only wants to avoid a lengthy legal procedure that would create legal uncertainty, which would be disadvantageous for both taxpayers and the tax authority, the bill argues.

The existing tax is Ft 850 per litre on spirits with 35-45% alcohol content and Ft 1,100 on stronger drinks.

The decision will make these products significantly more expensive, HVG adds.

Photo courtesy: itshungarian.com