Share with your friends

Hungary: “Special taxes” on telecommunications, retail sectors upheld (CJEU judgment)

Hungary: “Special taxes” on telecommunications, retail

The Court of Justice of the European Union (CJEU) today issued a judgment concluding that the “special taxes” imposed in Hungary on the turnover of telecommunications operators and undertakings in the retail trade sector are compatible with EU law—specifically, the Hungarian special taxes were found to be compatible with the principle of freedom of establishment and the EC directive on value added tax (VAT) (Directive 2006/112).


Related content

According to a related CJEU release [PDF 251 KB]:

  • Application of these special taxes to turnover is progressive (and steeply progressive in the case of the taxes imposed on the retail trade sector).
  • The special taxes are mainly borne by undertakings owned by persons of other EU Member States.
  • The fact that the subject undertakings achieve the highest turnover in the Hungarian markets reflects the economic reality of those markets and does not constitute discrimination against those undertakings.
  • Since the tax imposed on telecommunications operators does not have all the essential characteristics of VAT; that tax cannot be treated as comparable to VAT; and that tax does not jeopardize the functioning of the VAT system of the European Union.

The cases are: Vodafone Magyarország Mobil Távközlési Zrt. (C-75/18) and Tesco-Global Áruházak Zrt. v Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (C-323/18) (3 March 2020)

The CJEU judgment provides an interpretation of EU law; the judgment does not decide the dispute. Rather, it is now for the Hungarian court to dispose of the case in accordance with the CJEU judgment.

Read a March 2020 report prepared by KPMG’s EU Tax Centre

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal