On Thursday, the Court of Justice of the European Union passed a judgment in the Hungary vs. European Commission case, granting Hungary’s appeal against the decision of the Commission and repealing the decision which suspended the relevant taxation measure, Justice Minister Judit Varga told the Hungarian news agency MTI on Thursday.

She recalled that earlier the European Commission had obliged Hungary to suspend the application of the health care contribution of tobacco industry companies and the progressive tax rates of the food chain supervision fee.

Hungary submitted a petition against the decision, disputing whether the Commission resorted to suspension in an appropriate manner and objecting to the reasoning of the decision, Ms. Varga said.

The procedure of the Court of Justice of the European Union sought to determine whether the Commission had the authority to suspend tax measures they had concluded qualified as state aid, and if so based on what considerations.

Today’s judgment determined important criteria for Member States and the Commission about EU powers that can be exercised in connection with the introduction of taxes and other state aid measures.

The court’s ruling confirmed that the Commission does not have unlimited power to resort to this possibility, and it can only resort to it in well-founded and justified cases, the Justice Minister pointed out.

Ms. Varga added that with respect to the future the genuine significance of the judgment lies in determining precisely when the Commission – as part of a procedure aimed at the investigation of state aid – can order the suspension of the application of a national legislative act, including with respect to direct taxation which is an important aspect of Member State sovereignty.

(Ministry of Justice/MTI)