Hungary fights EC suspension of tobacco, supermarket levies

Hungary is petitioning the European Court to contest the suspension of its right to charge these levies – a prohibition that is supposed to remain in place during the course of the investigation, according to a newsletter from the court published on Friday.

The EC announced its in-depth investigations into the supermarket oversight fee and healthcare contribution payable by tobacco companies in July. It said at the time that those fees would be suspended until the investigation is complete.

In explaining the investigation, the EC said it would further examine whether the two recent Hungarian measures “with steeply progressive rate structures” are in line with EU rules on state aid.

The supermarket oversight fee ranges from 0.1% of turnover for stores with lower revenue up to 6% for those with higher sales.

The rate for the healthcare contribution by tobacco companies ranges from 0.2% to 4.5% of turnover, also depending on the scale of revenue.

“While a fee based on turnover does not in itself raise state aid issues, the Commission considers at this stage that the progressivity of the fee rates selectively favors companies with a low turnover and gives them an unfair competitive advantage over others,” the EC said in July.

The EC noted that new rules governing the fees came into force from the start of 2015 and the first payments were to be paid at the end of July, just before the suspension took place.