EU Challenges Hungary’s Retail Tax Regime for Violating Freedom of Establishment Principles

• The Commission sent a reasoned opinion to Hungary for not aligning its retail tax regime with EU freedom of establishment rules.
• Foreign controlled retail companies in Hungary face high progressive tax rates on turnover.
• Domestic retailers using franchise systems are not subject to the same high tax rates.
• The regime restricts foreign companies from restructuring like domestic companies.
• Hungary has not phased out the retail tax despite commitments and has extended it without a clear end date.
• The highest tax rates under the regime have increased over time.

Source: taxathand.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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