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Pálinka Debate: Hungarian Parliament Raises Brandy Tax Due To EU Pressure

Tamás Székely 2015.11.18.

Hungary’s Parliament has raised the tax on distillation of Hungarian pálinka fruit brandy for personal consumption by 700 forints (EUR 2.24) per litre to comply with a ruling by the European Court. From January it will be obligatory to purchase “distillation stamps” for every litre of pálinka. Individuals may purchase between 5 and 86 of the 700 forint stamps.

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 European Commission asked Hungary to take further measures.

Hungarian “pálinka” is a type of fruit brandy, distilled from a variety of fruits grown in almost every corner of the country. It is a strong and intense alcoholic beverage and comes in a variety of flavors, including apricot (barack), pear (körte), plum (szilva) and cherry (cseresznye). Pálinka-making has a long history in Hungary, dating back more than 500 years. Originally pálinka used to be considered more as a medicine than a drink, as it was believed to be a digestive.

via hungarymatters.hu and MTI