Budapest victorious in tax case

The Constitutional Court ruled in favour of the city in its complaint against the tax authorities, who should have determined the amount of the so-called solidarity tax in an official procedure. The city could then have appealed against this procedure. This was particularly important as, according to the Constitutional Court, the level of the tax should not impair the fulfilment of municipal tasks.

In an independent report, which the Constitutional Court also consulted, the State Audit Office (ÁSZ) also concluded that the increased solidarity contribution placed an unreasonable burden on the capital’s budget management in an already increasingly difficult environment. In addition, the fact that the capital pays more taxes than it receives in subsidies could violate municipal autonomy. This principle is enshrined both in the European Charter of Local Self-Government and in the German Basic Law.

‘Based on the reasoning of the Constitutional Court, we can be confident that the Budapest Court will deliver its final judgement in favour of the capital,’ commented the capital’s magistrate in a press release.