CJEU – Recent Developments in Direct Taxation 2015

I. S. 84Introduction

The Berlington Hungary case, which was decided by the Court of Justice (“Court” or “CJEU”) on 11 June 2015, concerns two amendments to the Hungarian legislation on the operation of slot machines. The first amendment introduced a drastic increase of the tax on slot machines operated in amusement arcades. The second prohibited the operation of slot machines in amusement arcades limiting this form of gambling to casinos only. Both amendments have the effect of restricting the activity of operating slot machines in amusement arcades. Both amendments affect resident and non-resident operators of slot machines equally without any distinction. Both amendments were introduced by a sort of fast-track legislation, which did not allow any transitional or adjustment period for the operators of slot machines to adapt to the new rules. The change of policy within one year (i.e. from tax increase to complete ban) also affected the operators of slot machines due to the fact that they incurred costs in order to prepare for the new regime envisaged by the first amendment, which has, however, never been put into place because the second amendment banned the activity in general. The imm...