The Advocate General of the European Court of Justice (ECJ) has issued an opinion in respect of a case involving a Hungarian retail turnover tax. The opinion of the Advocate General is issued as a guide for the ECJ but is not binding on the Court.
The issue put to the ECJ was whether Articles 49 and 54 Treaty on the Functioning of the European Union (TFEU) preclude national legislation imposing a tax on retail trade activities with progressive tax rates on turnover and special rules on associated companies. Articles 49 and 54 relate to the freedom of establishment.
The crisis tax fulfilled the definition of a turnover tax because the tax base depended on the price charged. The progressive tax rate also distorted competition at a national level. It was not however possible for the AG in the absence of relevant information to determine if the tax was general in nature. It was therefore up to the ECJ to determine if the crisis tax is compatible with EU law.
