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Hungarian special tax – Hattmannsdorfer demands consequences

by AI | 13.Oct 2025 | Europe in brief AI

A Hungarian special tax on grocery chains discriminates against foreign retail chains compared to their Hungarian competitors. The criticism is not new. Austria’s Minister of Economic Affairs is now calling on the EU Commission to take “swift action.”

Archive image - "If such practices become common, the internal market is at risk of collapsing," says Hattmannsdorfer. Photo: APA/Hans Klaus Techt

Vienna/Brussels (APA) – Austria’s Minister of Economy Wolfgang Hattmannsdorfer from the conservative ÖVP has demanded consequences against the special taxes imposed on food chains in Hungary in two letters to the EU Commission. The internal market rules must apply to everyone, Hattmannsdorfer urged the Commission to “act quickly.” Affected are, among others, Austrian retail chains such as “Spar” or “Hofer.”

In the infringement procedure opened in autumn 2024, a statement was sent to Hungary in June 2025. The EU sees a violation of the freedom of establishment. If the response from Hungary is insufficient, a lawsuit before the European Court of Justice (ECJ) could be the next step.

Hattmannsdorfer has now sent letters to Executive Vice-President Stéphane Séjourné and Vice-President Teresa Ribera. There must be a consistent approach against discriminatory measures that undermine the free internal market, he stated. He also demanded a swift review of the pending state aid complaint.

Special Tax Since 2022

Hungary has been collecting a special tax in the food retail sector since 2022, which amounts to up to 4.5 percent of net sales. This primarily affects foreign retail chains like Spar and Hofer. Hungarian franchise chains or national providers, on the other hand, are exempt from the regulation or only pay low taxes. This effectively creates a “domestic market surcharge” for European companies, criticized the Austrian. Hungary defends its approach with an alleged “passing on of inflation by Western retail chains.” “If such practices become common, the internal market is at risk of collapsing – with all the consequences for jobs, investments, and price stability,” said Hattmannsdorfer.

Furthermore, Hattmannsdorfer called for a strong European internal market strategy that ensures equal competitive conditions in all member states – not only in the movement of goods but also in taxes, levies, and corporate rights. “The internal market is Europe’s greatest success project,” he emphasized, referring to further market interventions in Hungary that are also already the subject of EU infringement procedures. (12.10.2025)