Spar files new EU complaint over Hungary’s supermarket tax

Salzburg-based retailer Spar has filed another complaint with the European Commission over Hungary’s special tax on food retailers, ORF reports. The tax requires Spar and other foreign supermarket chains to pay 4.5 percent of their annual turnover.

Hungary’s new government, led by Prime Minister Peter Magyar, has not abolished the tax introduced under former Prime Minister Viktor Orbán. It has instead amended a provision allowing large food retailers to split their businesses into separate companies to pay a lower rate or avoid the tax.

Spar manager Peter Manhartsberger told the Austrian Press Agency that breaking up Spar Hungary, which has hundreds of stores, into hundreds of companies was not an option. He called the amendment “absurd” and a form of harassment, and said requiring a company to change its legal structure was unlawful under EU law.

The European Commission has already taken Hungary to the European Court of Justice this year over the special tax and restrictions on retail margins. Spar lodged an earlier EU complaint in 2022 and has repeatedly called for the Commission to act, with support from Austrian politicians.

Spar, Hungary’s second-largest food retailer after Lidl, says the tax and margin restrictions cost it about 80 million euros and 30 million euros respectively last year. It expects the tax to cost up to 90 million euros this year and the margin restrictions about 40 million euros. The special tax rate for Hungarian franchise chains and domestic providers is between zero and 0.15 percent.

Manhartsberger said the measures were causing foreign supermarket chains to make substantial losses in Hungary. He said the intention was for foreign retailers to leave the country and sell their supermarkets, but that only Hungarian oligarchs were interested in buying them.