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Home made pálinka now taxed at HUF 700 per liter

EU

The Hungarian Parliament today approved legislation raising the tax on the home distillation of pálinka, the traditional Hungarian fruit-based spirit, to HUF 700 per liter, in order to comply with a ruling by the European Court, Hungarian news agency MTI reported.

Under the new law, Hungarians distilling pálinka at home for their personal consumption are required to purchase so called “distillation stamps” as of January, for every liter of pálinka produced, MTI said, adding that individuals can buy from five to 86 of the stamps.

In 2010, legislation was approved allowing Hungarian households to distill the equivalent of 50 liters of pálinka annually for personal consumption – free of tax.

Later, lawmakers raised the excise tax on palinka distilled for private consumption by contract distillers to 50%, while introducing a flat tax of HUF 1,000 per year for Hungarians who distill pálinka at home – in order to comply with an EU directive on the normal excise rate for such distillates.

But the European Commission asked Hungary to take further measures, and hence the new law, MTI reported.

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