7.7 C
London
Monday, November 11, 2024

Hungary did not keep its promises. Brussels initiates proceedings

Must read

- Advertisement -


The European Commission on Thursday opened infringement proceedings against Hungary over a retail sales tax on foreign companies.

These are regulations that impose restrictions on foreign companies operating in the… Hungary the highest and highly progressive tax rates on their turnover. In comparison, domestic sellers are not subject to the same higher rates because their turnover is not consolidated for tax purposes.

Domestic companies do not have similar restrictions

Moreover, the same preferential rules as domestic sellers apply to sellers operating in the system in Hungary franchise provided that they operate under a Hungarian brand and logo.

- Advertisement -

In addition, the Hungarian system prevents foreign sellers from restructuring business activities. Domestic companies do not have similar restrictions.

European Commission concluded that Hungarian regulations restrict the freedom of entrepreneurship because the tax burdens disproportionately, especially larger foreign companies.

As part of its KPO, Hungary has committed to gradually phasing out the retail sales tax, but so far it has not fulfilled its promises. On the contrary, not only was the tax extended, but no clear expiry schedule was provided, and rates were even raised over time.

Therefore, on Thursday, the EC sent a letter of formal notice to Hungary and called on it to lift the burden on foreign entrepreneurs. The Hungarian authorities will now have two months to respond and implement changes. If the EC finds the state's actions unsatisfactory, the next step will be to send a so-called reasoned opinion. If this is unsuccessful, the EC will submit a complaint to the Court of Justice of the EU.

Main photo source: A great shot of/Shutterstock



Source link

More articles

- Advertisement -

Latest article