End of ‘illegal’ tax loophole to benefit whisky

Exported drinks to Hungary, especially Scotch whisky, should now benefit from a fairer playing field after an “illegal” loophole in the Hungarian spirits market was brought to an end.

Scotch Whisky

The Scotch Whisky Association (SWA), who put Scotch whisky exports to Hungary to be worth £3.7million last year, launched two formal complaints with the European Commission (EC) and the European Court of Justice (ECJ) on taxation on issues to do with Hungary’s tax exemption for palinka, the country’s traditional fruit spirit.

Palinka had benefited from a zero tax rate as a result of a Hungarian government decision in 2010 placing domestically produced beverages at an advantage.

However following intervention from the SWA, on the basis that European Union regulations only allow a 50% reduction in certain circumstances, the ECJ ruled unequivocally that Hungary had breached its EU obligations and said that the tax exemption was illegal.

Nick Soper, director of European affairs at the Scotch Whisky Association, said: “The decision regarding tax treatment and excise rates in Hungary is welcome news for the Scotch Whisky industry and for free trade in the European Union.

“The European Court and the Commission have condemned the protectionist tax discrimination in Hungary and the damage it could do to fair competition, a basic premise of the Single Market.”

Separately, the EC has asked the country to amend its legislation applying two different excise rates for spirit drinks depending on their composition and production method.

The SWA had filed a complaint regarding duty discrimination, and the EC has now issued a ‘reasoned opinion’ asking Hungary to apply a single rate of excise on spirits.

EU rules state that one rate of excise duty must be applied to all spirit drinks based on their alcohol content. This is to stop competition being distorted within the EU.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Global Head of Marketing

ATOM Brands
Tunbridge Wells, GB

Sales Executive

Three Wine Men
Home-based but must be available to travel throughout the UK with frequent trips to London, GB

Senior Sales Operations Executive

Enotria&Coe
Park Royal, London, GB

Sales Administrator

Les Caves de Pyrène
Guildford, UK

On Trade & Corporate Accounts Manager

The Champagne Company
Birmingham, UK

Customer Service Assistant

The Champagne Company
Birmingham, UK

Key Account Manager - Distilling Sector - Scotland

Boortmalt
Scotland - call for exact details, UK

UK Brand Ambassador - Ableforth’s

ATOM Brands
Field-based, UK

Wine Sales Consultant

VSF GROUP
Valbonne, South of France, FR

UK Brand Ambassador

Mirabeau en Provence
London, UK

Pink Rosé Festival

Cannes,France
7th Feb 2018

VinoVision Paris

Paris,France
12th Feb 2018

Vinisud

Montpellier,France
18th Feb 2018
Click to view more

The Global Pinot Noir Masters 2018

Deadline : 26th January 2018

Cabernet Sauvignon Masters 2018

Deadline : 23rd February 2018

Click to view more

The Global Malbec Masters 2017

the drinks business is proud to announce the inaugural Global Malbec Masters 2017

The Global Sparkling Masters 2017

the drinks business is thrilled to announce the launch of The Global Sparkling Masters.

Click to view more