The ECJ delivered its verdict on the law today

The ECJ delivered its verdict on the law today

Trade body SpiritsEurope has welcomed a ruling that strikes down a Hungarian law exempting distillers of home-made pálinka from paying excise tax for the first 50 litres per year. 

The controversial law was introduced in Hungary in 2010 to allow an exemption for pálinka, a fruity brandy, produced for personal use. However in a ruling today (10 April) the European Court of Justice said the exemption is against EU law.  

Under the EU's rules, the maximum break distillers are permitted is 50% off the domestic excise-tax rate. 

“This ECJ judgment is important because it underlines that tax exemptions should in no case create discrimination,” said Paul Skehan, SpiritsEurope's director general.  “Similar exemptions, which exist here and there across Europe, are not only unfair but also create opportunities for smuggling and illegal alcohol, with potential dangerous outcomes to consumers’ health.” 

A European Commission report is due next year on similar exemptions, Skehan flagged. “We look forward to the commission report,” he said.