Hungarian politicians furious with EU court ban on tax-exempt moonshine
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E-mail Xinhua, April 11, 2014
Hungarian politicians were furious against a European Court of Justice ruling, which, made public on Thursday, bans the tax exempt distillation of fruit brandy palinka for home use.
The court upheld a European Union motion demanding that Hungary comply with a law limiting tax breaks on alcohol distillers to 50 percent off the domestic excise tax.
Hungarian officialdom has called home-brew palinka, the exemption for which was introduced by newly re-elected Prime Minister Viktor Orban in essentially the first law enacted after his 2010 election, "a historic tradition."
Rural Development Minister Sandor Fazekas called the court ruling "the latest infuriating provocation committed by the Brussels bureaucrats" at a news conference after the decision was announced.
Palinka, he said, is uniquely Hungarian and the government will find the legal remedy to preserve this valuable tradition.
He acknowledged that the decision was no surprise and his ministry would work together with the National Economy Ministry, which is responsible for taxes, to find a legal solution.
A statement by the Economy Ministry said it planned to start talks with the European Commission and would do everything in its power to keep the tradition of home-distilling palinka alive as part of Hungary's cultural heritage.
Meanwhile, Szabolcs Vamosi-Nagy, a tax expert for global professional services firm Ernst & Young (EY), told local wire service MTI that he couldn't see any loophole that would let Hungary keep its tax-exempt palinka.
The EU law allows a 50 percent tax deduction for spirits in special cases and Hungary had to know beforehand that its tax exemption was incompatible with EU law, he said.
At the National Palinka Council, Secretary Peter Dull said the council was "studying the ruling."
There are no specific data on how much has been brewed privately, Dull said, adding that between 2012 and 2013 there was a 7 million liter decline on the amount of spirits sold in Hungary on the open market. Endi
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