Saturday, November 22, 2014

The chain of sporting goods stores Herviz belonging to the group of Austrian Spar supermarket chain

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An interesting court case is involved, one major retailer of sporting goods on the Hungarian market, Herviz, which commenced proceedings in Hungary lifting Tax extraordinary retail a question that may be of interest to companies that are part of a group business conver and working in retail. The decision of the European Court on Hervis case (C-385/12) arrived yesterday. Let's see step by step the development of the story.
The chain of sporting goods stores Herviz belonging to the group of Austrian Spar supermarket chains, has initiated a process of legal action in Hungary on the rejection of its application for tax credit. The Hungarian conver legislation on the turnover of retail business requires that taxpayers in a group of companies that constitute the associates sommino the turnovers and then apply a progressive rate: the amount of tax so computed shall be apportioned on the basis of proven of their actual turnover. Hervis, having the head office in another member state, is subject to the payment of a part of the special tax due from all the companies in the group. As a result, Hervis must contribute an average conver rate well above that which would apply only considering the turnover from its stores. conver As a result, the company applied for the special tax relief, that request was rejected by the NAV. Herviz therefore initiated legal proceedings in the country, arguing that, while not discriminatory (the conditions are the same for all companies operating) the criteria established by the Hungarian legislation translates into a real disadvantage to companies belonging to a group. The national court therefore asked the European Court of Justice to determine whether the special tax on large-scale distribution (one of extraordinary taxes against the crisis conver introduced in 2010 by the then newly elected Orbán government and remained in force until 1 January 2013) is compatible with the principles of freedom of establishment and equal treatment. The European Court first pointed out that the legislation at issue distinguishes between taxpayers based on membership or not a group of companies and recognized the resulting disadvantage for associates than their own. The Court then noted that the rate is highly progressive, especially with regard to the upper echelon and that the tax is calculated for the associated companies on the basis of the consolidated group, if, in the case of a legal person not belonging to a group the tax base is limited to the sales of the taxpayer considered as a single (as in, for example, an independent company franchise). The final decision on the assessment of the law, announced February 5, 2014, is that the standard includes provisions more negative additional tax liability for companies whose associates are based in other EU countries, in comparison with the Hungarian companies "pure". conver In other words, the Court considers that the application of a highly progressive rate system such as this to a consolidated turnover of the risks of operating to the detriment of associated companies within a group, a company established in another was a member. conver "Regulation - reads the press - is, indirectly, against the right to freedom of establishment, which may be restricted only in cases of special exceptional." "At the moment, the statement concluded, we can not estimate the effect of this decision, but nevertheless this could be the basis for future judicial decisions and precedents for requests for tax refund."
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