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Hungary, EU VAT cases pose no risk of funding recovery

Issues

There is no chance Hungary will have to repay European Union funding in cases involving the country's application of EU support for VAT, the National Economy Ministry said on Friday.

The European Court of Justice on Wednesday considered appeals by Hungary against the European Commission's stand that Hungary may not use European Union funding to cover VAT costs in a motorway construction and a railway renovation project.

The VAT costs were accounted in the construction of a 34km section of the M43 motorway, between Szeged and Mak (SE Hungary), and the reconstruction of a rail line between Budapest and Boba. Hungary is arguing in the case that the VAT costs were included because the state-owned infrastructure company could neither reclaim VAT nor include it in its bills.

The ministry said on Friday that the cases involve "positive risk" for the budget in so far as a ruling in Hungary's favour would improve the general government balance and add to the EU resources the country has already used.

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