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Tax-free home-made pálinka contradicts EU law

D&T
April 10, 2014

It is inconsistent with the regulations of the European Union that Hungary made it possible to distill 50 liters of pálinka (a fruit brandy) per year without the payment of excise duty. Following this decision by the Court of the European Union, the Hungarian government European will initiate consultations with the European Commission to settle the issue.

The Court of the European Union has ruled that the distilling of pálinka shall be subject to taxation even under the quantity of 50 liters per year - the Hungarian regulation must adhere to the EU law.

Brussels launched an infringement procedure against Hungary in 2011, as the Orbán government had abolished the subcontract distillation spirits tax for home-made pálinka in 2010.

Since 2010, local farmers in Hungary have had the right to decide how to process fruits grown in their garden. In the countryside, pálinka is distilled in order to make use of fruits that could not be consumed or cooked fresh.

D&T

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