European Commission Urges Hungary to Abolish Discriminatory Retail Tax Regime for Compliance with EU Law

• The European Commission is calling on Hungary to abolish its retail tax regime to comply with the right of establishment
• Hungary is being sent a letter of formal notice for failing to bring its retail tax regime in line with EU laws
• Foreign controlled retail companies in Hungary are subject to high and steeply progressive tax rates on their turnover
• Domestic retailers operating under franchise systems are not subject to the same highest rates
• The retail tax regime prevents foreign controlled companies from restructuring their business operations
• Hungary committed to phasing out the retail tax regime in its Recovery and Resilience Plan, but has failed to do so
• Hungary has consistently prolonged the tax measure and increased the highest tax rates under the regime
• Hungary has two months to respond to the Commission’s letter of formal notice or may face further action.

Source: ec.europa.eu

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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