Orbán's special taxes

Spar calls for EU proceedings against Hungary

Due to the Hungarian special tax, the Spar Group is slipping even further into the red in its neighboring country.(Bild: S ROBIN – stock.adobe.com)

Will the special tax for large foreign companies introduced after Viktor Orbán's re-election in 2022 lead to another dispute between Hungary and Brussels? The Austrian retail chain Spar, like many other domestic companies, is massively affected and is now fighting against it. Company boss Hans K. Reisch is demanding that the EU Commission initiate infringement proceedings.

According to the "Salzburger Nachrichten" and the "Oberösterreichische Nachrichten", Reisch has sent letters of complaint to Margrethe Vestager, the Commission Vice-President responsible for competition, and Internal Market Commissioner Thierry Breton and the relevant Directorates-General. They are also said to have received support from Economics Minister Martin Kocher and Foreign Minister Alexander Schallenberg (both ÖVP), who wrote to Commission President Ursula von der Leyen criticizing interference with fundamental freedoms and discriminatory measures.

Up to 4.5 percent of turnover due
According to reports, the losses due to the special tax amounted to around 48 million euros, compared to just under 33 million euros in the previous year. The special tax affects trading companies as well as banks, insurance companies and energy companies. Up to 4.5 percent of turnover is due.

Austrian companies already made representations to Brussels in February in order to lobby at EU level for Hungary to be held to account for the measures, which the economy considers to be discriminatory and unlawful. The government in Budapest has not yet been able to conclusively explain why large Hungarian corporations are not subject to this tax obligation.

Hungary's head of government Viktor Orbán wants to use the special taxes to finance financial relief for the people.(Bild: APA/Georg Hochmuth)

Withdrawal from Hungary not currently planned
However, a withdrawal from Hungary, where the company operates 600 branches, is out of the question according to Reisch. "We are currently a strong number 2 in Hungary and also have the opportunity to become the market leader there if we could invest consistently. We are coming out of a very comfortable earnings situation and these exogenous factors are destroying everything," says the company boss.