ECJ – Recent Developments in Direct Taxation 2014

I. S. 66Introduction

The Hungarian Government has earned a reputation, since it came into power in 2010, for being rather inventive in introducing various new taxes, mostly in the form of special levies imposed on certain sectors of the economy (e.g. banking, telecommunications, energy supply, retail trade and, most recently, advertising). The Government justifies these levies on the ground that companies operating in these sectors make extra profits and are thus able to take a bigger share of the public burdens than other taxpayers. It is apparent that these special levies are aimed not only at raising additional tax revenues but also at pushing through various political or economic policy objectives. Because of their non-fiscal objectives, these taxes have a distortive effect on market conditions. On the other hand, many of these taxes are also suspect from a legal – especially an EU law – point of view, as they seem to specifically target foreign-owned businesses without, however, formally discriminating against the latter. In view of this, it is no surprise that the special taxes have been challenged both by the European Commission (“Commission”) and the taxpayers in various ways and...