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Hungary Retail Tax Compatible with EU Rules, Says CJEU Official

MTI-Hungary Today 2019.07.05.

Hungary’s progressive tax on retailers in Hungary is compatible with European Union rules, a Court of Justice of the European Union (CJEU) advocate general has said.

The opinion was issued in response to a request for a preliminary ruling from the Budapest Administrative and Labour Court in a case involving the local unit of UK supermarket chain Tesco.

Advocate General Juliane Kokott said on Thursday that the tax, which has a progressive rate based on turnover, neither restricts freedom of establishment for retailers with high sales nor gives an unfair advantage to businesses with lower turnover.

“Different taxation arising from a progressive rate does not constitute an indirect restriction of freedom of establishment … Different taxation arising from a progressive rate does not constitute a selective advantage for lower-turnover undertakings (and does not thus constitute State aid); nor can a higher-turnover undertaking rely on it in order to evade its own tax liability,” she added.

The opinion does not bind the court.

Featured image via Pixabay.