A controversial Hungarian tax imposed on building material producers during the coronavirus pandemic has officially been abolished following a ruling by the European Union’s highest court, ending a measure that industry players say caused severe financial damage across the sector.
Tax abolished from 1 June
From 1 June, companies are no longer required to declare or pay the so-called supplementary mining royalty, a special levy introduced by the Hungarian government during the COVID-19 crisis.
According to industry sources cited by 24.hu, the affected businesses were informed of the change by the Supervisory Authority for Regulatory Affairs (SZTFH). The authority later confirmed the information, stating that companies subject to the levy had been notified in May that they were exempt from both reporting and payment obligations.
The decision follows a judgment delivered by the Court of Justice of the European Union (CJEU) on 22 January 2026 in case C-144/24.
EU court found the measure violated EU law
The Hungarian authority acknowledged that the tax could no longer be collected because it was incompatible with EU law.
The CJEU concluded that although the levy appeared to be based on objective criteria, in practice it primarily and systematically affected companies from other EU member states. According to the court, this ran counter to one of the fundamental principles of the EU single market.
Had Hungary failed to comply with the ruling, the country could have faced a further infringement procedure and potentially substantial financial penalties. Such fines can either be paid directly or deducted, together with penalty interest, from EU funds allocated to Hungary.
Industry says tax caused heavy losses
The supplementary mining royalty and related price-control measures placed significant pressure on manufacturers of construction materials over recent years.
Industry sources told Hungarian media that several major companies suffered substantial losses under the system, while one long-established manufacturer ultimately collapsed, Portfolio writes.
The levy formed part of a package of government measures affecting the building materials sector. Critics argued that the regulations disproportionately burdened foreign-owned producers operating in Hungary.
Compensation claims may still cost taxpayers billions
While the abolition of the tax removes the immediate risk of EU sanctions, the financial consequences may not be over.
According to information obtained by 24.hu, several affected companies have launched damages claims against the Hungarian state, in some cases seeking compensation worth tens of billions of forints.
If courts ultimately rule in favour of the companies, the costs would be borne by Hungarian taxpayers.
If you missed it: Zelensky could visit Budapest soon: Hungary–Ukraine relations enter new era
Political controversy surrounding the tax
The measure has long been politically controversial.
Previous reporting highlighted that companies linked to domestic interests were less affected by the levy than some foreign-owned competitors. Critics also pointed to earlier statements by former construction and transport minister János Lázár, who openly discussed reducing the influence of foreign building-material manufacturers in Hungary.
The issue attracted international attention as well. In 2023, German Christian Democrat politician Gunther Krichbaum told Der Spiegel that the Hungarian government’s approach resembled “mafia methods”, alleging that targeted companies were first made unprofitable before investors with close government ties appeared with acquisition offers.
What’s next? BREAKING: Hungary bans new guest workers from three countries with immediate effect
