Hervis Turns To EU Court On Sectoral Tax In Hungary

Sports retailer Hervis has turned to the European Court of Justice claiming that the special tax levied on retailers is discriminatory against foreign-owned businesses while providing unfair advantage to domestic companies.

Thus the European Court of Justice has received its first such case from Hungary regarding the special tax from the Székesfehérvár court where Hervis filed its case, the Luxembourg-based court has confirmed.
The charge is a progressive tax levied on annual net revenues above Ft 500 million. Companies with annual net sales between Ft 500 million and Ft 30 billion pay 0.1% on their sales, 0.4% between Ft 30 billion and Ft 200 billion, and 2.5% on turnover above Ft 100 billion.

Hervis disputes the compatibility of the regulation with EU law, saying it discriminates against foreign-owned retailers, as Hungarian companies operate under a franchise scheme whereby revenues are split among many shops, hence they are exempt from paying the tax.

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