HUNGARY Report.pdf - Agra CEAS Consulting

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DG Trade: Identification and analysis of trade barriers for processed foodHUNGARY1.3. Non-tariff barriers1.3.1. Registration, Documentation, Customs ProceduresThe Customs Act C of 1995 is the primary legislation governing customs matters – thishas initiated simplified procedures and introduced the EU Customs Code and the CNclassification system. A fully computerised customs-clearance system has been introducedin 1998 and fast track processing for authorised trade is also in operation. An amendedCustoms Act was adopted in May 2000, which provides for further alignment of theprovisions on customs procedures and the extension of the application of simplifiedprocedures, reflecting the Community Customs Code to a large extent.Importers must file a customs document with a product declaration and, upon importation,present Hungarian Commercial Quality Control Institute (KERMI) certifieddocumentation to clear customs. For certain products, this permit may be replaced by othernational certification and testing agency documents, although KERMI will be largelyresponsible for food and drink products (see below).The application of a simplified customs valuation procedure is possible for imports ofcertain products, including fruit and vegetables. An average world market price iscalculated by the customs authorities and the importer has the right to choose whether toaccept. Importers accepting the average price should not declare the transaction value.On 12 July 2000 the EU and Hungary signed an agreement which aims to establish cooperationon the transport of goods by road and promote of combined transport. Thecontracting parties undertake to set up a common system for regulating future roadtransport market access between them.Circulation of excisable goods: while Hungary introduced a tax warehouse system in1998, it has not as yet introduced fully EU-compatible legislation on the movement andholding of excisable goods (i.e. in line with Directive 92/12).1.3.2. Indirect Taxation, Levies and Charges (other than Import Duties)As of 1 January 1997, Hungary does not apply any border levies or charges to EUMembers and other WTO Members (a number of such charges were previously applied).Bureau Européen de Recherches Hungary / 4
DG Trade: Identification and analysis of trade barriers for processed foodHUNGARYThe Hungarian Act C III of 1997 on Excise Taxes, which entered into force on 1 January1998 (as amended by Act LXIX of 1998 with regards to certain rates and furtheramendments in 2000 on wines – see below), is broadly in line with the requirements of theEU system. Excise taxes apply on selected alcoholic beverages (spirits, beer, sparklingwine, and intermediate alcohol products) with the exception until recently of wine fromgrapes. From 1 August 2000, following a decree by the Finance Ministry, wine is alsosubject to an excise duty, set at Ft 5/litre. This replaces the previously imposedconsumption tax of 11% (see below). As part of the new scheme, domestic wine producesproducing in excess of 1,000 litres annually must be registered with customs authoritiesand apply for tax warehouse licences.However, an important continuing discrepancy between the Hungarian excise system andCommunity requirements results in discrimination between fruit spirits and other spirits(thus, in effect, between national and imported spirits i ). In particular, different rates ofexcise duty continue to apply on fruit brandies and other spirits, in contrast to EU ruleswhich stipulate a single excise duty for interchangeable products (tax structures laid downin Directive 92/83). The rates tend to exaggerate price differentials between products andare open to challenge as being discriminatory against more expensive imports and infavour of local producers of brandy (palinka). In fact, Hungary applies the followingexcise tax rates:fruit and grape brandies: 1,250 ft per litre pure alcohol (lpa);other spirits and alcohol : 1,500 ft per lpa.The excise tax is combined with a high level of ad valorem import duty. The cumulativelevel of duties/taxes has been high, as of 1 January 2000 at 68 % duty plus 1,500 ft per lpafor most important spirits. Bulk imports of Cognac, Armagnac, other wine-based spirits,Calvados, rum/tafia and liqueurs (but not bulk whisky or gin) within tariff quota limitsenjoy lower rates of duty. Imports of bottled Brandy, Cognac, Armagnac, other winebasedspirits, Calvados, rum, tafia, liqueurs and all other spirits (bottled or bulk) are thusplaced at a disadvantage compared with certain bulk imports. The Commission has takenthe view that Hungary should harmonise the excise duties for locally produced andimported spirits and brandies at their lowest level (Commission Progress Report,November 2000 and 1999 Accession Partnership). In the framework of the accessionnegotiations, Hungary has committed itself to a gradual alignment.Bureau Européen de Recherches Hungary / 5
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