Hungarian Prime Minister Péter Magyar is heading for a confrontation with Brussels on economic policy. Unlike his predecessor Viktor Orbán, Magyar is seen in the EU as a beacon of hope for constructive cooperation. Yet the new government is keeping the special tax on the turnover of foreign retailers introduced under Orbán.
In April, the Hungarian parliament also extended the cap on profit margins for certain products. Both measures hit foreign chains such as Spar, Penny, dm, and Tesco, which have been posting losses in Hungary for years. The tax applies only to foreign companies, not Hungarian ones – a clear violation of the EU’s freedom of establishment, according to the EU Commission.
The Brussels authority filed a lawsuit against Hungary at the European Court of Justice (ECJ) at the end of April. At the same time, Competition Commissioner Teresa Ribera is examining a state aid procedure. If she suspends the collection of the tax, it could increase pressure on Budapest.
Source: www.handelsblatt.com
