The Court of Justice of the European Union (CJEU) has ruled that the additional mining fee imposed by the Hungarian government constitutes a restriction on freedom of establishment, in a judgment handed down on Thursday 22 January (Case C-144/24).
The European Commission is challenging a Hungarian decree which, since the Covid-19 pandemic, sets a reference price for five construction materials (sand, gravel, etc.) and requires companies selling these materials above the reference price to pay an additional mining fee.
In its view, this measure restricts freedom of establishment by considerably reducing the profits of the companies concerned, as the reference prices are lower than market prices. Moreover, given that the fee mainly concerns enterprises owned by companies established in other Member States, the Hungarian legislation at issue constitutes indirect discrimination.
In its judgment, the Court welcomes the Commission’s action on the provisions relating to the Hungarian mining fee.
According to the European Court, the fee necessarily makes it less attractive, if not impossible, to exercise freedom of establishment, since it is likely to prevent a return on the investments made by the companies liable for it. Furthermore, as it applies mainly and systematically to companies established in other Member States, it constitutes indirect discrimination based on the location of the company’s registered office.
Unlike other cases (C-75/18 and C-323/18), the CJEU adds, revenue is not used to determine the basis of assessment of the fee, but only to identify the companies liable to pay it. What’s more, this fee is not progressive, as it is always set at 90% of the difference between the reference price and the selling price of the materials concerned.
However, the Court did not overturn the Hungarian decree imposing a minimum extraction obligation on mining operators.
See the judgment of the Court of Justice: https://aeur.eu/f/kcm (Original version in French by Mathieu Bion)