Hungary’s shifty home-made pálinka business…

Pálinka’s can be made in factories, but at home distilleries as well. Until 2016, there only was a little limit to producing homemade pálinka, which concluded in many people making hundreds of litres of pálinka in a year. However, since then, some new regulations have been made. And it seems that Hungarian pálinka producers do not like these.

A stereotype about Hungarians is that we can find loopholes easily in any system. Is taxation no exception?

In the article of magyarnemzet.hu the situation of domestic pálinka cooking in Hungary is accurately summarised. The site emphasises that, according to the Hungarian Pálinka Council’s estimation, about one-third of the distilleries avoid taxes when making pálinka at home.

Pálinka-making changes since 2016:

• 700 Forint (2.2 Euros) tax ticket per one litre distillate
• Maximum pálinka producing in a year is 86 litres per person
• For private use only, not for trading

All in all, there are 23,662 distilleries at Hungarian homes, yet officially only 6918 of them are used. It means that tax avoidance on pálinka is high, even though the tax is not too high. Although tax authority records claim that there was more pálinka-tax income in 2018 than in 2017, there are still not many pálinka taxpayers in Hungary.

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When observing a map of Hungary’s distilleries, there are an overall 23,662 registered pálinka distilleries. The most can be found in Pest county and Budapest (2423 distilleries), Veszprém county comes second (2135 distilleries) and Zala county third (1756).

The conclusion of magyarnemzet.hu’s article is that, if the National Tax Office (NAV) misses the opportunity to put an emphasis on control, there are doubts about distilleries keeping themselves to paying taxes in the future.

Featured image: https://www.facebook.com/palinkaofficial

Source: magyarnemzet.hu