New revenue in the European Union - The plastic packaging waste-based own resource

1 hét 3 nap ago


From 1 January 2021, a new EU own resource, a contribution based on non-recycled plastic packaging waste was introduced in the European Union's budget for 2021-2027 as a new source of revenue. The European Union would like to encourage the Member States to reduce packaging waste and, through the implementation of the European Plastics Strategy, to help Europe move towards a circular economy that minimizes the waste and the leakage of resources, emissions, and energy. The question may be how this change will affect the operation of the Union and how it will work in practice.


It is well known that the European Union's potential for recycling plastic waste is untapped. Around 26 million tons of plastic waste is generated in Europe each year, less than 30% of which is recycled.[1] With a small percentage of plastics returning to the economy, the annual cost of treating plastic waste is between 70 - 105 trillion euros, and the European Union cannot afford this expenditure in the long run. To make environmental protection as effective as possible, the European Union has already taken a number of steps, such as laying down rules on marine litter or significantly reducing the use of plastic bags in several Member States.[2] However, the plastics industry is not a negligible area for the European economy, therefore increasing the sustainability of the sector can offer new opportunities, helping innovation, job creation, and competitiveness. Integrating such a complex value chain can benefit everybody from plastic manufacturers, retailers, consumers and recyclers.[3] But how does this fit into the circular economy? In December 2015, the Commission adopted a new EU action plan,[4] covering the main aspects of the whole lifecycle and value chain of plastics. In 2017, the Commission confirmed that it will focus on the production and use of plastics and will work to ensure that most plastic packaging will be recyclable, and landfills will be banned by 2030.[5]

Revenues of the European Union before the new source of revenue

In view of the importance of this topic, describing the European Union's revenue system before introducing a new source of revenue is of great significance. The EU budget is financed almost entirely (98%) from its own resources, and there are several sources of revenue. The main source of EU funding is revenue from non-exchange transactions, including own resources. Three types of own resources are known: traditional own resources, the own resource based on Value Added Tax (VAT) and the own resource based on Gross National Income (GNI). Other revenues from EU activities (such as competition fines) generally account for less than 10% of total revenues.

The Union's "traditional" own resources include customs duties (levied on imports from third countries) and sugar levies levied on economic operators and collected by the Member States on behalf of the EU. Traditional own resources must be entered in the Commission's account with the Treasury or National Central Bank by the Member State at the latest on the first working day following the 19th day of the second month following the month during which the entitlement was established (or recovered in the case of the separate account).[6]

The essence of the VAT-based own resource is that a certain percentage of the estimated amount of value added tax (VAT) collected by the Member States is transferred to the Union, helping to cover costs.

The GNI-based own resource was created by Council Decision 88/376 /EEC, the essence of which is to levy a uniform percentage of the Member States’ gross national income determined during the budgetary procedure for a given year.[7] Originally, it would have been collected only if the other own resources had not fully covered the expenditure, but today, however, it is mainly used to finance the EU budget. In accordance with EU regulations, the same rate is levied on the gross national income of all Member States.[8]

The other group of revenue is created by other revenues and balances carried over from the previous year, including tax paid by EU staff on their salaries, contributions made by non-EU countries to certain EU programs, and fines imposed on companies for breaching competition or other rules. The correction mechanisms adjust the budgetary deviations between Member States' contributions.[9]

The plastic packaging waste-based own resource 

The contribution based on non-recycled plastic packaging waste was introduced on 1 January in 2021 as a new source of revenue. A uniform call rate of 0.80 euro/kilogram will be applied to the weight of plastic packaging waste that is not recycled, with a mechanism to avoid excessive contributions from less wealthy Member States. The contribution is calculated on the basis of Eurostat data provided by the Member States under their reporting obligations.[10]

Directive 94/62/EC on packaging and packaging waste covers all packaging placed on the European market and packaging waste, whether generated at industrial, commercial, official, business, service, household, or any other level, regardless of their material. This Directive aims to harmonize national measures concerning the management of packaging and packaging waste in order, on the one hand, to prevent any impact thereof on the environment of all Member States as well as of third countries or to reduce such impact, thus providing a high level of environmental protection, and, on the other hand, to ensure the functioning of the internal market and to avoid obstacles to trade and distortion and restriction of competition within the Community. The Member States should take measures, such as national programs, initiatives, extensive producer responsibility schemes, and other economic instruments, to recycle at least 65% of packaging waste by 2035 and at least 70% by 2030. Recycling targets vary depending on packaging materials.[11] Under the implementing decision of the Directive, member states are obliged to provide data on the generation and recycling of plastic packaging waste, which are publicly available.[12] The European Commission calculates the contributions primarily on the basis of projections to be adopted by it and by the Member States, as the exact data are reported to Eurostat in the second year following the reference year. As soon as the final data are available, the European Commission will adjust the calculation of Member States' contributions accordingly after July 2023.


In summary, the new source of revenue is likely to have a positive impact on the European Union's economy and the environment. The potential annual energy savings that could be achieved by recycling all global plastic waste would be equivalent to 3.5 billion barrels of oil per year.[13] In today’s world, where 31% of plastic waste ends up in landfills and 39% is incinerated, it means a loss of valuable resources and is not acceptable. A plastic-based source of revenue will help achieve the greener future that everyone needs.


For a list of references, click HERE.

Author: Szófia Németh-Kiss, law student, University of Debrecen, Faculty of Law

[1] European Commission: A new approach to the use of plastics (2018)   (2022. 04. 23.)

[2] Directive of the European Parliament and of the Council on the reduction of the environmental impact of certain plastic products   (2022. 04. 23.)

[3] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - A European strategy for the role of plastics in the circular economy  (2022.04.23.)

[4] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Achieving the material cycle - An EU action plan for the circular economy, Brussels, 2015.12.2. COM(2015) 614 final

[5] Commission work program for 2018 - COM(2017) 650.

[6] Communication from the Commission to the European Parliament, the Council and the Court of Auditors - Consolidated annual accounts of the European Union – 2019 2020.6.26. COM(2020) 288 final

[7] COUNCIL DECISION of 24 June 1988 on the system of the Communities' own resources (88/376 /EEC, Euratom)

[8] Communication from the Commission to the European Parliament, the Council and the Court of Auditors - Consolidated annual accounts of the European Union - Consolidated annual accounts of the European Union - 2016 Brussels, 26.6.2017 COM (2017) 365 final

[9] Revenue of the Union - Presentation of the European Union – 2021 (2022.04.23.)

[10] Plastics own resource -    (2022. 04. 23.)

[11] Directive 94/62 / EC on packaging and packaging waste   (2022. 04. 23.)

[12] IMPLEMENTING DECISION (EU) 2019/665 amending Decision 2005/270 / EC establishing the formats relating to the database system pursuant to Directive 94/62 / EC of the European Parliament and of the Council on packaging and packaging waste   (2022.04.23.)

[13] European Commission - Fact Sheet (2018) Questions & Answers: A European strategy for plastics  (2022.04.23)

Kategória: Waste ManagementEuropean UnionBrexit Eng: Fogyasztóvédelem: Consumer Protection: 16th Anniversary: 

Charity as a business?

1 hónap 3 hét ago

For a large part of the year, but especially during the holidays, for many companies or wealthier individuals, it comes to the fore to support initiatives, goals, and organizations which are important to them, with donations and offerings. The charity sector has grown enormous. Many of which see only thats positive side, although it also provides opportunities for tax avoidance, while (under with the law) shortening the budget by significant sums. After all, in most countries, including Hungary, if we donate to a charity, we can describe it from different public charges. It has also been argued that by supporting the charity with various tax technology solutions, the State is giving up the ability to decide on the use of resources democratically (i.e. through the representatives we directly elect).


A donation is a grant in cash or in-kind that the donor provides to a non-governmental organization (‘NGO’), an ecclesiastical legal person, and for a public interest obligation without any obligation to repay. These benefits are collected by organizations by their primary purpose and public benefit purpose. So purposefulness is important: for example, in the case of an ecclesiastical legal person, it is expected to serve the credit activity that is defined by law. In the case of non-profit organizations, it must serve the purpose of the activity specified in the memorandum and articles of association. The donor’s goal in transferring the money/assets is not just the intent to assist but often the underlying cause of tax evasion or publicity accompanying the donation as an excellent marketing opportunity.

1. Would they be so beneficial? It is possible to discover underlying content?

Per domestic law, we can only talk about a donation if the support is selfless, free of any kind of support, and the support cannot have the purpose and result of receiving support from the sponsor. Thus, the rules of the gift which are regulated by civil law shall apply to the donation. If the donation complies with this rule as well as the requirement to be bound by the purpose, the donor will receive certain benefits. These benefits also appear at the level of corporate tax (‘TAO’), small business tax (‘KIVA’) and value-added tax.

2. Tax credits

According to the Hungarian legislation – namely the Act LXXXI of 1996 on Corporate Tax and Dividend Tax (’TAO Act’) –, the pre-tax profit in the case of corporate tax can be reduced by the percentage of the donation specified by law.[1] Under this Act, this can be done within the framework of a donation contract, the beneficiary can be a non-profit non-governmental organization, association, the Hungarian Damage Fund, the National Cultural Fund, a compensation fund, a higher education institution, or a trust fund, and the transfer must be voluntary and unpaid.

Concerning the TAO, it became possible to support the very popular spectator-team sports after 2011: the European Commission authorized Hungary first in 2011 and then in 2017 to provide state aid to the sports sector by means of a tax rebate through the TAO Act. In the first round (2011), the list included football, handball, basketball, water polo, and hockey, and then further expanded with volleyball in 2017.

The basic aid in relation to the TAO is described by the TAO Act as follows: „up to the amount of the aid certificate issued, he may claim a tax credit from the tax for the tax year of the aid (benefit) and subsequent tax years, but for the tax year ending last in the sixth calendar year following the calendar year of the aid (benefit), that this aid does not increase its pre-tax profit when determining the tax base; the condition for recourse shall be that the taxpayer has no overdue public debt when the application for the issue of the refund certificate is submitted by the body entitled to receive the aid.”[2] Alongside this basic aid, further tax credits could also be available, the conditions of which are set out in a specific legal act.

In addition to that many NGOs have identified a high risk of corruption and lack of transparency in connection with the support system, several other concerns have been raised. According to the recently published data, 450 billion Hungarian Forints (‘HUF’) have been poured into visual sports in the last six years, 43 percent of which went to football. In the five sports, the top five teams since 2011 have been able to pocket a total of 53 billion HUF, of which 23,3 billion went to football. In six years, the Puskás Academy in Felcsút received the most ‘TAO-money’, 12.5 billion HUF, but more and more money has recently arrived in Mezőkövesd, where it received almost 779 million HUF last year, and Kisvárda in the second division received more than 580 million HUF in support. A previous report, from 2015, was made by Transparency International under the title “Corruption Risks in Hungarian Sports Financing”, shows that these figures are not low at this time either.

Figure 1. The total value of the support certificates issued by MLSZ for the 2014/2015 season

Source: Hungarian Central Statistical Office

Based on the grant certificates (the existence of which is a condition for the use of the basic grant), it is possible to trace the amount distributed in football. In fact, TAO aides can be seen as a specific form of state aid that companies provide, through a state incentive, by redirecting corporate tax. In other words, the support provided to sports organizations under the TAO Act is reduced by the State by reducing the corporate tax that can be collected, at the expense of the ‘tax expectation’. In contrast to traditional sponsorship, which companies payout of their after-tax profits, that is, from their after-tax income, sports grants under the TAO Act reduce companies ’pre-tax profits. As a factor reducing the tax base, sports aides under the TAO Act reduce the state's tax revenue, i.e. it causes a loss of public money.

Prior to the introduction of the TAO aid scheme, the government sought the opinion of the European Commission, arguing that the introduction of a tax-subsidized aid scheme would in many cases (for example, support amateur sports) only mean a change in funding: economic actors instead of the central budget. provide funding. The Hungarian legislators consider this measure to be one of the least distortive types of state intervention, for example, compared to direct aides. However, the disproportionate distribution of aides shows that market mechanisms do not dominate the allocation of aides.

When the European Commission assessed the TAO aid scheme, it considered the resources used to be ‘public resources’, i.e. public funds. It stated that „state resources will clearly be involved in the program, as the Hungarian central budget will lose tax revenue as a result of the program.” It also stated that the use of the funds did not constitute state aid for the companies providing the aid but for the beneficiary sports organizations. However, the Commission did not oppose this, as it considered that „the safeguards proposed by Hungary guarantee the limitation of distortions of competition resulting from state intervention and that the overall effect of the measure is positive.” The European Commission did not attach any importance to the selection between sports organizations receiving funding.

3. The publicity of the donation?

The donation could also be offered to parties and non-governmental organizations, for a period of time the donor could only do so by taking his name. This, in fact, was what the Act LXXVI of 2017 on the Transparency of Organizations Receiving Foreign Funds was about, according to which party foundations are obliged to disclose the names of those who have contributed more than five hundred thousand Hungarian Forints to their operation. At the time of this legislation, e.g. the Helsinki Commission, which receives a lot of money from the Scandinavian countries under Hungarian law, if it received money from abroad, it could not happen anonymously. Moreover, according to this Act, an association and foundation that receives a monetary or other financial benefits of 7,2 million HUF directly or indirectly from abroad in a tax year are considered to be an organization supported from abroad. The grantor has a non-Hungarian registered office or place of residence or habitual residence outside Hungary.

The Court of Justice of the European Union has ruled that the aforementioned Act, which is often referred to as ‘Lex NGO’ by several news portals, contradicts the regulations of the European Union and of the Charter of Fundamental Rights as well. The Act in question requires NGOs to disclose if they receive funding from abroad and to indicate everywhere that they qualify as a ‘foreign-sponsored’ organization. According to the ruling, the regulation violates the principle of free movement of capital, the rights to the protection of personal data, and the principle of freedom of association, so the law „jeopardizes the role of civil society as an independent actor in democratic societies, undermining the right to freedom of association against them and restricting the privacy of donors.”

Thus, on May 18, 2021, Act XLIX of 2021 on the Transparency of the Non-Governmental Organizations Active in the Field of Public Policy was adopted, with which the aforementioned Act expired. This means that it is possible to donate anonymously again.

4. Is the tax credit considered to be the counter value of the donation?

Certainly not, but there is a motivating force for less tax to be paid to the state, as this appears as an item reducing the tax base.

It is a constitutional principle that taxation must be general, equal, and proportionate. Within proportionality, our Fundamental Law prescribes a contribution to public burdens under the principle of „bearing capacity and participation in the economy.” With the help of its redistributive function, the State can distribute the revenues of public finances to the appropriate strata, thus achieving basic services such as education and health care, which are mostly available to everyone on an individual basis. Donation reduces budget revenues by receiving a tax credit/exemption. Furthermore, the donor can decide according to his or her own set of values which strata, groups are in need, which decision is often not the same as the group that is really in need. While support from the budget is said to be anonymous by coming from the state, the donation creates a sub-superior relationship between the donor and the donor.

There are no recent statistics on the amounts provided by donors in Hungary; based on the published data of 2016, the Hungarian Central Statistical Office only provides insight into the donation characteristics of non-profit organizations. It is clear from the chart that education, culture, and social care are the highest numbers in 2016.

Figure 2. The average amount of grants provided by sponsors per organization by activity group

Source: Hungarian Central Statistical Office

From the average aides per organization, a clear conclusion could be drawn: education, social care, and politics are the most affected areas.

5. What is the impact on the fair distribution of public spending?

Figure 3. The distribution of donor non-profit organizations by county

Source: Hungarian Central Statistical Office

Tax payments are included in public revenues within public revenues. The State determines the planned expenditures and revenues in the budget law each year. Due to the tax-reducing effect of donations, unpaid taxes, which would otherwise be one of the main sources of revenue, cannot be redistributed by the State to places that should be visibly improved, such as health care. It is clear from the figure that there is a lot ahead of this area in terms of the distribution of donations: such as politics and sports.

The impact of donations on increasing social disparities is also reflected in our society. Wealthier parents support the child’s elite school and kindergarten, thus the school and kindergarten of poorer children show an even higher level of backwardness than before. A similar phenomenon can be observed between counties: in general, the donor supports a specific goal or institution in its own environment, so the financial resources remain fixed, so the lagging behind of smaller, poorer settlements becomes even more pronounced.

The total amount of grants awarded by donor organizations is around 140 billion HUF per year. 73% of this is provided by organizations based in the capital, and – taking into account that 67% of all grants are distributed locally – it can be stated that the donation activity is mainly concentrated in Budapest. The distribution by organizational type is as follows: 64% of the grants are provided by classic NGOs, 10,6% by business federations, and 26% by other non-profit organizations. Similar proportions apply to their revenue, expenditure and grants received. As a result, small towns receive less support than the developed capital, so the schools and hospitals there cannot develop to such an extent and compete with the larger cities. Due to the lack of development, young people settle in more developed cities and thus smaller villages and towns become depopulated over time.


In the light of what has been said, it is clear that there is a business opportunity in the donation and its nature-shaping, loss-making nature of the economy is clear. The disproportionate distribution of aids raises the question of the efficiency and sustainability of the current regulation of donation both at the institutional level and at the local level.

The study was made under the scope of the EFOP-3.6.1.-16-2016-00022 "Debrecen Venture Catapult Program".

For a list of sources, click HERE.

Author: Gál Klaudia Kitti, law student, University of Debrecen, Faculty of Law


[1] Article 7. (1) TAO Act.

[2] Article 22/C. § (2) TAO Act.

Kategória: Central BudgetLocal BudgetBrexit Eng: Fogyasztóvédelem: Consumer Protection: 16th Anniversary: 

Medical on-call reform in Hungary: An inefficient solution to the primary health care system

1 hónap 4 hét ago

The current form of the Hungarian general practitioner (‘GP’) system is unsustainable, as it is still unable to perform its role as a gatekeeper. Doctors working as retirees, the irreplaceable human resources, unorganized patient pathways, increasing workload, and untapped professional capacity result in a hospital-centric health care system while outpatient and inpatient clinics are unable to perform their original function, and increasing waiting times in all sectors of the sector weaken patients’ confidence in healthcare. On the one hand, these problems raise dilemmas about the inefficient use of public money, on the other hand, the need for an organized integration of private health into the current structure. The state is also working to reduce the growing burden on GPs, however, a lack of experience often gives rise to solutions that tend to escalate the current situation.


The basis of continuously available health care is the general practitioner and the pediatrician, who, together with the medical on-call services, must provide the needs and requirements of the residents of the practice 24 hours a day. The territorial care system includes the care obligation of the resident of the area. When organizing care, it must be taken to ensure that care is available at well-planned times. The walls of the GP system have been collapsing for a long time, and the most obvious evidence of this has been the inadequate functioning of the central on-call system. In the case of on-call care, every minute counts, it is important that the patient has access to life-saving and prevention of serious or permanent damage to health as soon as possible.[1] One consequence of the increasing workload on primary care is increased waiting times, which, however, are most unacceptable and can claim lives in emergencies. At the beginning of 2021, plans to reform the central on-call system were launched, including the fact that the systems maintained in parallel were unnecessary (ambulance, GP, emergency care) and that conflicts between the municipalities forced into the alliance caused most of the problems. In the opinion of the decision-makers, therefore, this is an organizational inadequacy and not a lack of financial resources.

The current structure is unsustainable and this is mostly due to organizational inadequacies, however, the solution chosen is, in our view, not only appropriate to the roots of the problem, but also to symptomatic treatment.

Figure 1. Number of GP surgeries nationwide

Source: NEAK[2]

After all, the biggest fault of the on-call system was the loss of efficiency in cases of the increasing workload of already overburdened GPs, often retired, while the burden on a care system (ambulance service) with a similar problem was without adequate financial and human resources and consistent organizational solutions.

1. Veterinary horse of the reforms: On-call duty

The National Ambulance Service is a central budgetary body under the authority of the Minister for Health, which divides the country into seven regional centers. OMSZ's participation in on-call care is not new. According to the Government Decree of 2004, in the framework of primary care, the out-of-order performance of general practitioner duties must be performed through an on-call service or a central emergency service, in which case the general practitioner cooperates with the ambulance service. [3] Currently, the central medical on-call system is part of the primary care of the general practitioner, which helps to perform the “gatekeeper” function of this layer by taking a significant burden off the shoulders of the inpatient care system. According to the plans, following the successful pilot project in Hajdú-Bihar County, the on-call services would have ceased to exist by 2022, and district centers under the auspices of the OMSZ would have been established.

The importance of the reorganization is rooted in the fact that the lack of human resources in primary care is also felt during the provision of services. Most GPs retire, so there are age-related drop-outs and workloads. In addition, pediatricians are more affected, as they cannot be replaced by other doctors due to legal constraints, so their activities can be concentrated in fewer places.

Figure 2. Number of GP patients between 2010-2019

Source: NEAK

The aim of the change is to reduce the number of on-call sites (by establishing district centers), in the coordination and efficient operation of which the OMSZ would play a dominant role. The basic idea is not from the devil, and the involvement of the ambulance service in organizational matters in this way could be positive, but due to low salaries, lack of infrastructure, and lack of professional esteem, this organization also has difficulty in performing its tasks. This is also shown by the fact that from 2022 the central watch system was not operated by the OMSZ.

2. Funding issues

The services are financed from the Health Insurance Fund, as are other areas of health care. The basic amount of remuneration is HUF 42 per person, which varies by the multiplier specified by law. [4]

In settlements with a population of up to 40,000, out-of-hours general medical care can be provided through a central duty, in which case the health care provider is entitled to an increased fee (especially in addition to the provision of a dispatcher service). However, despite the increase in GP salaries in 2021, the central emergency department will not be able to compete with the outsourced hourly rates for emergency care wards as well as inpatient wards.

Thus, the mandatory fulfillment of adequate general medical care required by local governments in the Act on the Local Governments of Hungary[5] also imposes a significant burden on local entities, as they are often forced to balance it due to low funding. However, the quality of GP care depends on the economic strength of the municipality.

While according to NEAK data, there are 665 vacant GP practices in March 2022, this number is “only” 645 in June 2021, of which 24 have been vacant for nearly 15 years, 60 for more than 10 years, and 160 for more than 5 years. It appears that the 70% increase in the level of primary care wages since 2010 is not enough to deal with vacant practices, which is a problem in on-call care, among other things. The government's solution, in addition to placing central services in the OMSZ, is to support the encouragement of communities of practice to address not only primary care problems but also to transfer some of the outpatient care to this scheme.

In our view, however, enforcing this form of cooperation also raises dilemmas. The rate of the increase in the salary of a general practitioner was made dependent by the legislator on the rate of cooperation (close 100%, loose 80%, no 30%). With the narrowing of the range of opportunities, the profession, which is already struggling with a lack of human resources, has received another blow. As a general rule, European Union law provides for a general prohibition of State aid, as provided for in Article 107 (1) TFEU.[6] Only subsidies which come from State resources in such a way that they confer an economic advantage on those concerned and are not granted in a general manner (selective) and that the aid affects or is likely to affect competition and trade between the Member States are prohibited. However, primary health care falls within the category of services of general interest, which is not covered by the EU framework (nor Article 107 TFEU) but must be governed by the provisions of the Member States, so that the solution adopted by the legislator does not constitute a prohibited subsidy. [7]

3. Hajdú-Bihar County: Sample project

There are eighty-one municipalities in Hajdú-Bihar County and the area had twenty-one duty centers. In the pilot project launched in the summer of 2021, ten district centers under the control of the OMSZ would have been established instead of the latter, which will be operated from Debrecen and Hajdúszoboszló. It is planned that from January 2022, this structure would have prevailed throughout the country, however, the problems and difficulties that arose did not allow it.

In our opinion, the transformation is necessary and under the direction of the OMSZ, not only cost reductions would be achieved, but the reorganization would provide patient care and emergency care. The reason for this is that the current form of the GP system is unsustainable, due to the lack of human resources and the professional staff working as retirees.

4. Rescue officers

The new system is based on ambulance officers (health professionals with higher education). Involving them in on-call care strengthens effective patient care, as they can perform most medical interventions, but they are also rooted in their greatest limitations, as they do not include needs that are as common as prescribing or a funeral visit.

Another problem is that the new system has been set up so quickly that it is difficult to carry out the increased tasks while increasing the shortage of human resources.

In our view, more experienced rescue officers would be needed and some of the legal restrictions could be reconsidered in order to effectively ensure adequate patient care.

5. Organization and information

In Hajdú-Bihar county, two companies performed on-call tasks: az Országos Orvosi Ügyeleti Kft. és a Debreceni Alapellátási és Egészségfejlesztési Intézet.

These organizations employed GPs who were on call in the county. After the OMSZ took over, the channeling of the former GPs into the new system was (and still is) extremely slow, which also made it difficult to implement an effective on-call system. The effectiveness of the reorganization, which began barely half a year ago, is further weakened by the fact that patients have difficulty adapting to changed circumstances. For example, an old phone number that is no longer in use is often called.

6. IT development

In order to minimize costs and perform tasks efficiently, a modern IT infrastructure is required, which ensures a proper connection between the OMSZ and the general practitioners and patients.

As the on-call service is used in an emergency, there would be a need for quick and easy IT services and support for the work of the OMSZ. The current system is outdated, unsuitable for responding to the challenges of the age, so an IT investment that is currently costly but profitable in the long run would be good.

7. Financing

As a result of the Health Service Legal Relations Act,[8] the salaries of GPs have increased significantly. The consequence of wage increases is that fewer and fewer doctors are on duty (in addition to performing their basic duties). In contrast, the wages of nurses have not changed, so those with experience often look for a more lucrative job, which makes it difficult for young people to transfer knowledge easily and quickly.


The reorganization of the on-call system is important as there is a shortage of human resources in primary care. Most GPs are retired, so they are expected to be out of work and less burdened by work.

In our opinion, the organization of the on-call system under the control of the OMSZ would be suitable for solving some of the current problems affecting primary health care, however, the existing legal constraints and the inconsistency of implementation lead to systemic problems. This, in turn, delays changes to the on-call system at the national level. In our opinion, it would be worth considering extending the powers of ambulance officers, raising the salaries of OMSZ employees, and implementing modern IT solutions to reduce the burden on the general practitioner system, which is struggling with a lack of human resources and thus improve the efficiency of on-call care.


Authors: Máté Sándor Deák, Assistant Lecturer at the Faculty of Public Health of the University of Debrecen, and Dr. Dóra Lovas, Assistant Lecturer at the Faculty of Law of the University of Debrecen; Research fellow at MTA–DE Public Service Research Group

The study was made under the scope of the EFOP-3.6.1.-16-2016-00022 "Debrecen Venture Catapult Program". 

For a list of references, click HERE

[1] Article XX. The Fundamental Law of Hungary (25 April 2011).

[2] [accessed March 2, 2022]

[3] 47/2004. (V.11.) ESzCsM decree on certain organizational issues related to the continuous operation of health care

[4] Article 19. 43/1999. (III.3.) Government Decree on the detailed rules for issuing health services from the Health Insurance Fund

[5] Article 13. 4. Act CLXXXIX of 2011 on Local Governments of Hungary.

[6] Article 107. (1) Treaty on the Functioning of the European Union, OJ C 326, 26.10.2012, pp. 0001– 0390 (’TFEU’)

[7] Article 14. and 106. TFEU, and Article 26. Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community, signed at Lisbon, OJ C 306, 17.12.2007, pp. 1–271.

[8] Act C of 2020 on Health Service Legal Relations.

Kategória: Health CareBrexit Eng: Fogyasztóvédelem: Consumer Protection: 16th Anniversary: 

Milestone: The introduction of a global minimum tax as a possible solution for tax avoidance

2 hónap 2 hét ago

Hungary, too, has accepted the proposal made by the OECD regarding the global minimum tax, which is planned to apply to the taxation of profits of larger multinational companies from 2023 onwards. The goal of the framework signed by 136 countries in Paris is to introduce a universal (minimum) 15% tax (with regards to Hungary, applied to business profits generated in the corporate, industrial and other sectors) for companies (e.g., Facebook, Google, Microsoft, Apple) with group-wide revenues exceeding 750 million USD. From the beginning, the supporters focused on the fiscal aspects (the revenue-generating capability of taxes), meanwhile the opposers (e.g.: Hungary) considered the long-time investment more important (e.g., the role of low tax rates in the encouragement of investments). A consensus regarding the framework has been achieved, and while the detailed rules are still being developed, the advantages and disadvantages of the proposal are already clearly visible.


Previously we’ve written about how the introduction of a global tax minimum can cause a significant difference in the economy of not only Hungary, but the whole world. Many may question why this step is so imperative, why it is justified, and what the history behind it is. How big of an impact the still ongoing coronavirus pandemic had on the introduction of the minimum tax further deepens the question, since, as a result of the crisis starting in 2019/20, multiple countries decided to limit the tax income of multinational companies, and the displacement of their profits to tax havens. 136 countries, including Hungary, signed the proposal in October 2021.


The development of the global minimum tax’s draft by the OECD (Organisation for Economic Co-operation and Development) has already begun in 2019. The draft can be divided into two large segments: „Pillar 1” and „Pillar 2”. The first part relates to the taxation of digital enterprises (in cases where their activity is not localised), while the second part is linked to the global minimum tax and the enterprises engaging in „real economic activity”. The goal of the first pillar is to make multinational companies pay taxes in not only the countries they originate from, but in the locations of their subsidiaries as well. This way, if the subsidiary’s tax liability does not reach the minimum tax amount, the parent company’s country can collect the tax difference. If they don’t exercise their right, the other countries where they have subsidiaries could collect the difference.

The second pillar of the draft aims to set a minimum tax rate (as of right now 15%), which opens up the possibility to reduce the tax avoidance of multinational companies. The importance of this measure lies in the fact that a multinational corporation pays significantly less tax if they base their corporation in a country where the corporate tax rate is lower than in their country of origin. The corporate tax rate heavily differs in the European Union as well: e.g. in Malta the tax rate reaches 35%, while in Montenegro or Hungary it is 9%, among the lowest in Europe (see Table 1, based on data from December 2021).[1] The acceptance of the proposal could result in the compensation of these deviations, since if the tax liability of a multinational corporation’s subsidiary does not reach the minimum rate, the difference will have to be paid in the corporation’s home country. [2]

Table 1

Statutory Corporate Income Tax Rates in certain European Countries, 2021


Tax Rate









Republic of Moldova




Bosnia and Herzegovina




Republic of Kosovo


North Macedonia






Source: Corporate Tax Rates around the World,
2021, Sean Bray, December 9, 2021

The advantages of the global minimum tax

The main benefit of the introduction of the global minimum tax matches the main goal of the project, reducing tax avoidance, although it could prove beneficial in many other aspects as well. The OECD describes these advantages in its impact analysis, the most important of which is that the solution based on consensus provides a favourable investment opportunity, since it can encourage investment by increasing predictability, transparency, and tax security.

Additionally, the OECD mentions the indirect impacts of the global minimum tax, from which I’d like to highlight a few:

  1. Budgetary margin: as a result of the revenue growth, the support for the public finances will be guaranteed, which is particularly relevant for developing countries.
  2. Moderate tax competition: the less intense tax competition may have the effect of supporting public finances in the longer term
  3. Impact on corporate competition: the competition between corporations, as well as the outcome, could be influenced by the fact that larger multinational corporations must pay greater taxes than previously.[3]

The disadvantages of the global minimum tax[4]

In addition to the benefits listed above, there may of course also be negative consequences. The corporate tax competition affects where the individual companies invest (not only international, but national investments as well), since the rate of the corporate tax is relevant, as well as where they must pay it. Eliminating the differences could result in smaller countries being seen as less of a favourable investment option compared to larger ones. The reason for this is that larger companies might prefer larger countries to smaller ones, because of their more significant market attractiveness.

The different tax rates between the different countries form one of the bases of tax competition between countries. The OECD aims to reduce this competition (in addition to combating tax avoidance and promoting fair taxation), although impact analyses need to be performed in order to determine how this will affect the economy as a whole. According to an impact analysis concluded by the OECD, annually a 50-80 billion USD global tax revenue is to be expected, thanks to the innovations of the first and second pillar. Despite everything, impact analyses concluded in some individual countries are not available for the public, or they were not even completed at all.

The framework is seen by many as not as flexible in terms of tax bases, thus it can be detrimental in countries that operate with higher tax rates but determine their tax bases otherwise.

Because of these differences, numerous companies operating in countries where the tax rate is higher than the OECD rate may also be subject to the regulation.

Hungary is among the countries that have accepted the proposal.  Although it’s important to highlight that this wasn’t always the case. In 2021, the government still rejected the OECD’s proposal. Several arguments have been put forward in favour of rejection. The country’s corporate tax rate is minimal compared to the tax rates of other countries, so they can only incorporate the 15% minimum tax in the form of a tax increase. The other argument is jurisdictional rather than economical since it’s connected to the fact that the determination of the tax rate and the tax policy is national competence.[5] Compromises had to be made in favour of the Hungarian side: thus, the corporate tax rate will not change; a 10-year transitional period will be established, during which the tax return will decrease, and a reduced tax calculation will apply, moreover the taxation will not affect the corporations performing real, actual economic activity.[6]

So, when our country accepted the proposal, it took into account the complex effects of the framework. It’s important to consider that if a corporation chooses a country to invest in, their decision is not only influenced by the tax rate, but for example the skilled workforce, the development of digitalisation, and the infrastructure as well. Furthermore, the minimum tax rate applies to the taxes on company profits taken together (e.g. TAO, IPA), while it provides a discount to companies performing real economic activities; this way there will be no increase in burden for the majority of the affected. In addition, the framework will contain numerous customisable points, which could further improve the competitiveness of our country.


Overall, the OECD’s two-pillar proposal, which includes the global minimum tax, may have negative effects, as well as multiple positive ones; although looking at both sides, I still believe the positive effects remain dominant if the implementation of the regulations into practice happens according to plan. Based on the impact analysis done by the OECD, this draft could contribute to increasing tax revenue, improving investment factors, and can also have a favourable impact on developing countries. On top of all this, the most important goal is to minimize tax avoidance, and this solution is certainly a milestone in this regard.

The final detailed rules are expected to be adopted in 2022 and be in use by 2023. Since the determination of tax rules is a national competence within the European Union, the process will also require the adoption of a common directive in this area within the community and its implementation at the national level. As such, the target date of 2023 is seen by many as too ambitious and unsustainable.


Author: Ildikó Krivanics, third-year law student, University of Debrecen, Faculty of Law



[1] Corporate Tax Rates around the World, 2021, Sean Bray, December 9, 2021 (

[2] A globális minimumadó-szabályozás története és várható hatásai,

[3] Tax challenges arising from the digitalisation of the economy economic impact assessment: Webinar presentation 20 October 2020 – 16.00-17.00, OECD

[4] Unintended and Undesired Consequences: The Impact of OECD Pillar I and II Proposals on Small Open Economies, Matthias Bauer, 2020 July



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Steps Towards a Reformed Financial Criminal Law in Hungary

2 hónap 3 hét ago

With Hungary’s accession to the European Union, the national and European budgets got into considerably closer contact with each other (Polt, 2019a, 139.). On the other hand, we should also see and note that after the accession, the practice of budget fraud related to acquisitions within the EU has evolved. These crimes included various VAT-related frauds such as accepting pro forma invoices related to domestic sales activities and other economic activities related to acquisitions and sales within the Community (Balláné Szentpáli, 2020, 67.). In the second part of our series on budget fraud in Hungary, we focus on the effective Hungarian regulation.

The New Concept for the Complex Protection of the Budget

Special mention needs to be made of the entry into force of the Treaty of Lisbon in 2009, which can be regarded as an important milestone in the history of the protection of the financial interests of the EU since it empowered the European Union with a supranational legislative competence in the field in question (Jacsó & Udvarhelyi, 2018, 329., Miskolczi, 2019, 162–163.). This legislative competence is regulated in Article 325(4) TFEU, according to which, ,,(...)the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, after consulting the Court of Auditors, shall adopt the necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Union with a view to affording effective and equivalent protection in the Member States and in all the Union's institutions, bodies, offices and agencies”. These provisions of the Treaty enable the EU to adopt directly applicable, supranational criminal law norms in the form of regulations in this field. However, there are scholars and Member States, who and which do not accept such a competence (Farkas & Jacsó & Udvarhelyi, 2019, 91.).

Over time, the aforementioned, disputed solution was terminated and the fraud-­related crimes (tax fraud, employment-related tax fraud, excise violation, illegal importation, VAT fraud, unlawful acquisition of economic advantage, violation of the financial interest of the European Communities) were integrated into one legal definition by Act LXIII of 2011 (Jacsó & Udvarhelyi, 2019, 128.), as an important step within the framework of the reform of the financial criminal law in Hungary. The new ’terminus technicus’ of this integrated legal definition was budget fraud. The reason behind this was to eliminate the duality of several, special fraud-based neighbouring criminal offences to be found in the former Criminal Code (Act IV of 1978), which aimed at damaging the budget, and thereby to avoid discrimination among them (Madai, 2017, 274.).

From the 1st January 2012, the new concept has been introduced, which – similarly to the Directive (EU) 2017/1371, also known as the PIF Directive, which replaced the PIF Convention (for details see a previous blog post of the author) after five years of negotiation, as a part of the Commission’s overall strategy to strengthen the protection of the Union’s financial interests (Juszczak & Sason, 2017, 80.) – is characterised by the unified regulation of the revenue and the expenditure side of the budget. It should be noted that according to Art. 1(1)(a) of the PIF Directive, the concept of „Union’s financial interests” covers all revenues, expenditure, and assets covered by, acquired through, or due to a) the Union budget; b) the budgets of the Union institutions, bodies, offices, and agencies established under the Treaties or budgets directly or indirectly managed and monitored by them (Madai, 2019, 132., Miskolczi, 2013, 10.).

Therefore, the legal definition of budget crime was created as a result of consolidating nine crimes. On the revenue side, tax fraud, employment-related tax, excise violation, illegal importation, VAT fraud, crime affecting the financial interest of the EU, and any other forms of fraud that affect or cause damages to the budget are included in this legal definition. On the expenditure side, the new criminal offence unites the former definition of the unlawful acquisition of economic advantage, the crime affecting the financial interests of the EU, and all the forms of fraud that violate or cause damage to the budget (Polt, 2019a, 140.).

The Effective Hungarian Regulation

The legislator used the abovementioned approach of regulation without any essential changes, the effective Criminal Code (Act C of 2012) essentially took over the provisions of the former Criminal Code with some minor modifications. The result of this consolidation is expressed by the legal definition of budget fraud punishable under Section 396 of the CC. Thus, this Section punishes fraudulent conduct exercised in respect of both the payment obligations and any of the funds originating from any of the budgets listed in the explanatory note specified in Subsection (9) of the criminal offence. Both the revenue and the expenditure side of the EU budget are covered by budget fraud based on the legal definition (Miskolczi, 2014, 3., Miskolczi, 2016, 1323.). Given the latter, the effective regulation protects not only the budget which is managed by the European Union or by the other Member States but also the budget of any other foreign states (Elek, 2018, 238.).

It should be noted that new punishable conduct was introduced into the present legal definition, which is “making a false statement” in connection with budget payment obligation or with any funds paid or payable from the budget. With this provision, the legislator wanted to emphasise that the misleading conduct during the tax return or reporting obligation in electronic form is also covered by this criminal offence (Miskolczi, 2018a, 119.).

Moreover, concerning the common protected legal interest, all offences against the budget are regulated in a separate chapter (Chapter XXXIX under the title ”Criminal offences against public finances”) which contains four criminal offences:

(1) Fraud relating to social security, social and other welfare benefits (Section 395 of the CC)

(2) Budget fraud (Section 396 of the CC)

(3) Omission of oversight or supervisory responsibilities in connection with budget fraud (Section 397 of the CC)

(4) Conspiracy to commit excise violation (Section 398 of the CC)

The new legal definition of budget fraud eliminated the initial problems (Udvarhelyi, 2014, 188.), terminated the differences between the protection of the national and the EU budgets, the issues of cumulation generated by the previous legal definition, and it formulated the criminal conducts abstract enough to include all conducts causing damage to the budget, and simultaneously, it stays in compliance with the wording of the PIF Convention – and the wording of the aforementioned PIF Directive – and by now the legal definition of budget fraud became a well-functioning, efficient instrument for the legal practitioners (Miskolczi, 2018b, 289.).

In the respect of the PIF Directive, it is important to note that it, inter alia, provides for a common definition of fraud and other criminal offences affecting the EU’s financial interests and also for certain types and levels of sanctions when the criminal offences are defined in this Directive have been committed. The Directive is also important for the work of the European Public Prosecutor’s Office (hereinafter: EPPO). The Directive and EPPO are fully interlinked and have to be considered together as key elements of the comprehensive approach towards a stronger protection of the Union budget. The catalogue of criminal offences defined in Arts. 3 and 4 of the Directive determine the material competence of the EPPO under Regulation (EU) 2017/1939. The EPPO is not applied to all Member States; it is established in the form of enhanced cooperation. However, for the unified protection of the financial interests of the European Union, it is helpful to agree with the non-EPPO Member States and the EPPO Member States to develop efficient and active cooperation (see Farkas, 2019, 83.).

Statistical Trends

We can point out firstly that budget fraud accounts for nearly two-thirds of economic crimes committed in Hungary. Concerning budget fraud, since the entry into force of the new CC, the authorities registered 252 cases in 2013, 1226 cases in 2014, and this figure has grown to 1686 by 2016; since then, we are witnessing a dramatic decrease which has led to 1049 cases in 2020. Nonetheless, it should be noted that this decrease is significantly minor than the one we have recently experienced in the number of registered criminal offences in total.

Registered budget fraud (2013–2020), source: Unified Criminal Statistics of the Investigation Authorities and the Prosecution Service

Registered criminal offences (2013–2020), source: Unified Criminal Statistics of the Investigation Authorities and the Prosecution Service

This situation is even more interesting if we take into account that regarding the financial loss caused by economic crimes, budget fraud represents 90% of economic crimes and is accompanied by a very low rate of return, approximately 10% (Horváth, 2019, 175.).

Closing Remarks

It is important to bear in mind that we are faced with a complex area of law where cooperation and joined-up thinking among different fields of expertise are essential for an effective investigation of a case. The relationship between tax administration and criminal proceedings is very close since budget fraud also exhausts commonly the elements of tax infringement at the same time (see also Molnár, 2011.). This raises several questions and problems (see Elek, 2016, Elek, 2019a), of which only the mutually exclusive effects of the procedures, the applicability of sanctions, and the applicability of each piece of evidence are exemplary (Horváth, 2019, 148.).

In summary, it can be definitively concluded that it is extremely difficult to fight against budget fraud and therefore crime prevention may be necessary to fight off the number of criminal offences as well as diverting law enforcement agencies into the right direction regarding ongoing procedures (Balláné Szentpáli, 2020, 67.). For all these reasons, provisions accelerating proceedings – which constitute a novelty under the new Criminal Procedure Code (Act XC of 2017, which entered into force on 1 July 2018) – in the context of budget fraud go beyond the framework of domestic regulations, as it is not irrelevant how much time will be spent on adjudicating conduct which infringes the financial interests of the EU. Thus these possibilities in the field of criminal proceedings serve not only the interests of Hungarian law enforcement but also the interests of the EU (Szentpáli, 2019, 121., Tóth, 2011, 438., see also Polt, 2019b, 14.).

Although it is also related partially to criminal procedural law, it is important for our topic that it is more and more apparent in cases of criminal proceedings initiated due to the budget fraud – which manifest the protection of the financial interest of the EU – that by now the European criminal law became a reality, in which – in addition to the protection of common interests – the legal practitioners cannot omit the legal harmonisation of criminal procedural law and the consideration of procedures conducted in the other Member States (Elek, 2019b, 234.).

* * *

For a list of references, click HERE.

Author: dr. Petra Ágnes Kanyuk, Ph.D. Student at the Géza Marton Doctoral School of Legal Studies of the University of Debrecen, Department of Criminal Law and Criminology

The study was made under the scope of the Ministry of Justice’s program on strengthening the quality of legal education.

Source of the image used: [accessed April 8, 2021]

Kategória: European UnionBrexit Eng: Fogyasztóvédelem: Consumer Protection: 16th Anniversary: 

The Origins of the Criminal Law Protection of the Budget in Hungary

3 hónap 1 hét ago

The protection of the European Union’s financial interests holds a prominent place within the EU’s institutional framework, as is historically evident from the inclusion in EU primary law of the requirement that Member States ensure their effective protection, equivalent to that reserved for their national counterparts (Miskolczi, 2019, 165., Kaiafa-Gbandi, 2019, 52.).

We must recall that the approach according to which criminal law falls outside of the scope of competence of the European Communities (hereinafter: European Communities/EC) and that the Member States did not explicitly transfer their sovereignty to the EC in the field of criminal justice, therefore the EC does not have its criminal legal system (Weller, 1998, 331.), dominated for a long time in the history of European integration (see also Haas, 1958., Rosamond, 2000.). Up until 1993 – when the EU was established and the Maastricht Treaty entered into force (Várnay & Papp, 2010, 54.) –, there was hardly any consideration as to whether a community-level criminal law and the harmonisation of the Member States’ criminal law rules were necessary, and even afterwards, this question arose only in connection with the possible means of protection against frauds infringing the EC’s financial interests (Farkas, 2018, 75., see also Madai, 2011, 265–275.).

As regards the Hungarian regulation, on the road leading to the establishment of the legal definition of budget fraud currently in force in the new Criminal Code (Act C of 2012), the effective protection of the budget of the EU or EC as a need was the most pronounced among the factors which brought about the formulation (Miskolczi, 2018, 99.).

In the following, we aim to summarise the outline of the development of budget fraud in Hungary in two parts.

Outside the EU – Among the Initial EU Expectations

At the European level, in 1995, almost twenty years after the failure of the first draft to establish a legal basis for the protection of the EC’s financial interests in the founding treaties, the first elements to harmonise the protection of the EC’s financial interests through criminal law were introduced, when the Convention on the protection of the European Communities’ financial interests (hereinafter: PIF Convention) and the protocols thereto (from 27 September 1996 to 19 June 1997) were adopted, under the third pillar of the EU (Mirișan, 2019, 179.). It should be noted that „PIF” is the French acronym for protection des intérêts financiers (protection of financial interests), used by the European legislature and also in case-law and legal writings (see also Madai, 2008, 200–218.).

The legal framework established by the Convention and its protocols has been complemented by general measures in the field of criminal law applicable at the Union level, including in matters relating to the protection of its financial interests, regarding the confiscation of any instruments, proceeds, or other property related to crime, as well as combating other illegal activities affecting the licit economy, such as money laundering and corruption (Tudor, 2017, 173.). As follows, two main directions have been developed: either the assimilation of the financial interests of the EU with the national interests, as some Member States did, or the adoption of specific legislation on the protection of the financial interests of the EU, as the other Member States did (Elek, 2019, 224–225.).

Regarding Hungary, it was required to ensure the criminal protection of the EU’s financial interests even before the accession of the country to the EU, as the PIF Convention and its protocols – among other reasons, as several pre-accession funds were available for the candidate countries through which the EU’s budget could potentially be damaged (Madai, 2010, 97.) – were between the EU documents which had to be implemented by all the pre-accession States. Although Hungary has formally ratified the PIF Convention only in 2009 by Act CLIX of 2009, to ensure compliance with the Convention, the individual criminal offence named “Infringing the financial interest of the European Communities” was incorporated in the former Criminal Code (Act IV of 1978) by Act CXXI of 2001. It is also worth noting that in the context of the phenomenon under review, a completely new economic-social environment was formed from the mid-1990s in Hungary. The term white-collar crime has appeared, and the issue of interconnected Value Added Tax (hereinafter: VAT) fraud strengthened (Balláné Szentpáli, 2020, 67.).

Therefore, the Hungarian legislator – contrary to numerous other EU Member States – tried to fulfil its legal harmonisation obligation not by amending the existing, individual legal definitions of illegal acts committed against budgets but it created a new, individual criminal offence (Elek, 2018, 236., Udvarhelyi, 2014, 174.). This resulted, however, in that the national and the EU budget were protected by different legal definitions in Hungary until 2012. The protection of the national budget was covered by tax fraud (Section 310 of the former CC), employment-related tax fraud (Section 310/A of the former CC), excise violation (Section 311 of the former CC), illegal importation (Section 312 of the former CC) and unlawful acquisition of economic advantage (Section 288 of the former CC), while the financial interests of the European Union were tried to be safeguarded by the legal definition of a violation of the financial interest of the European Communities (Section 314 of the former CC) (Jacsó & Udvarhelyi, 2019, 131.). Consequently, the PIF Convention was incorporated in the former Criminal Code in a manner that the fraud definition of the Convention was converted into a legal definition, following the Hungarian principles of legislative editing (Madai, 2010, 96–97.).

Ambiguous Acceptance

By applying the above method, the Hungarian legislator fulfilled its obligation, since the definition used was consistent with the text of the PIF Convention. Despite this, it can be established that the solution chosen by the legislator was not the most fortunate one, since it did not harmonise the created legal definition sufficiently with the already existing similar legal definitions, as a result of which the legislator made unjustified differences between the protection of the national and the EU budgets in multiple respects, and numerous distinguishing issues also arose in connection with the criminal offence. The distinguishing was made more difficult for example by the fact that the legal subject of three criminal offences included therein was partially identical, and that the nature of the criminal conduct of all three criminal offences included the making of false statements or misrepresentation specified in some other form (Miskolczi, 2007, 33–35.).

Besides, both the legislator and the case law failed to interpret several important concepts, including – among others – the concept of “aids” and “payments to the budget” (see Pfeffer, 2016, 130–131.) which were newly incorporated in the legislative text from the Convention (Miskolczi, 2018, 99.), and the legal definition did not find its place in the former Criminal Code either (it could be found among economic crimes, in the newly created Title IV, under the subheading “Miscellaneous provisions”).

For all of the above reasons, the consideration of the solution was ambivalent among the legal practitioners, and although the application of the law did not cause any problems concerning EU aids, the criminal cases initiated regarding payments made to the EC budget were missing. And this was not desirable by the EU either – in addition to the Hungarian legal practitioners – especially because in the fight against the crime which was considered as one of the most important driving forces behind the criminal law harmonisation (Jacsó & Udvarhelyi, 2018, 327.), the PIF Convention aimed explicitly at efficiency, through uniform concepts and proportional sanctioning, etc. (Miskolczi, 2018, 99.).

* * *

For a list of references, click HERE.

Author: dr. Petra Ágnes Kanyuk, Ph.D. Student at the Géza Marton Doctoral School of Legal Studies of the University of Debrecen, Department of Criminal Law and Criminology

The study was made under the scope of the Ministry of Justice’s program on strengthening the quality of legal education.

Source of the image used: [accessed April 8, 2021]

Kategória: European UnionBrexit Eng: Fogyasztóvédelem: Consumer Protection: 16th Anniversary: 

Thoughts on the new Guidelines on State aid for climate, environmental protection and energy

3 hónap 3 hét ago

In January 2022, the new Guidelines on state aid for climate, environmental protection and energy 2022 (’CEEAG’) will replace the Guidelines on State aid regarding environmental protection and energy 2014-2020 (’EEAG’). The Commission intends to align the new guidelines with the EU's objectives and targets set out in the European Green Agreement and with regulatory reforms in the fields of energy and the environmental protection, while extending the scope of soft law to climate protection.

Main elements of the guidelines

The guidelines extend the range of investments and technologies that Member States can support. The Commission aims to support all technologies that contribute to the implementation of the European Green Deal. The guidelines therefore make it possible to provide aid in numerous areas relevant for the Green Deal. This includes new or updated sections on aid for the prevention or reduction of pollution other than due to greenhouse gases, including noise pollution, aid for resource efficiency and circular economy, aid for biodiversity and for the remediation of environmental damage. Moreover, the CEEAG features dedicated sections for aid incentivising investments in flagship areas such as energy performance of buildings and clean mobility, covering all transport modes.

The Commission has reformed the previous rules on reductions on certain electricity levies for energy intensive users. The rules aim at limiting the risk that, due to these levies, activities in certain sectors move to locations where environmental disciplines are absent or less in line with the EU requirements. In order to cater for the enhanced decarbonisation efforts required to meet the EU climate targets, the CEEAG cover the reductions in all levies financing decarbonisation and social policies.

The new guidelines have streamlined the number of eligible sectors with objective indicators at sectoral level so that Member States can ensure a level playing field. According to the Commission, the revision of the previous rules was also necessary to provide more incentives for the progressive decarbonisation of the companies concerned, inter alia by linking the reduction in levies and the beneficiaries' commitments to reduce their carbon footprint.

The guidelines seek to ensure, through various safeguards, that aid is actually granted where it is needed to improve climate and environmental protection and that it does not go beyond what is necessary to achieve environmental goals and does not distort competition or the integrity of the Single Market. In this context, the guidelines enhance, for example, the involvement of stakeholders in the design of large aid measures by requiring Member States to consult stakeholders on the main points of the planned intervention.

The new guidelines approximate the relevant EU legislation and policies in the environment and energy fields, by, among others, ending subsidies for the most polluting fossil fuels. The Commission anticipates that measures involving new investments in natural gas are unlikely to be approved unless it is demonstrated that the investments are compatible with the Union's 2030 and 2050 climate targets, facilitating the transition from more polluting fuels without locking-in technologies that may hamper the wider development of cleaner solutions. The new guidelines have been supplemented with the possibility of aid for the closure of coal, peat and oil shale plants to facilitate decarbonisation in the power sector.

According to the Commission, in the future, the more flexible and simpler rules of the new guidelines will help Member States to achieve the objectives of the Green Deal and provide the necessary aids.

Changes in compatibility conditions

The guidelines set out the Commission's assessment criteria and the conditions under which State aid in the fields of climate, environmental protection and energy is compatible with the internal market. While the 2014 guidelines listed the compatibility criteria in seven points, the new provisions have become much more detailed and set up three major categories. The guidelines distinguish between positive and negative conditions and set out in a separate section the requirement that the overall balance of the aid be positive.[1]

Positive conditions: the aid must facilitate the development of an economic activity. This requires the identification of the economic activity which is being facilitated by the measure, its positive effects for society at large and, where applicable, its relevance for specific policies of the Union. It is required that the aid have an incentive effect and be in compliance with the relevant provisions of EU law.

The negative conditions are essentially intended to ensure that the aid measure does not unduly affect trading conditions to an extent contrary to the common interest. The guidelines distinguish between conditions that help to minimize distortions of competition and trade and to avoid undue negative effects on competition and trade. The former includes the requirements of necessity, appropriateness, proportionality and transparency.

The Commission takes a close look at the positive and negative effects of the aid on competition and trade and considers only aid measures whose positive effects outweigh their negative effects to be compatible with the internal market. This means that the overall balance of the aid is positive.

The Commission will continue to approve measures under the guidelines for a maximum period of 10 years, although this may be further limited in some cases (to four years or less).[2] If a Member State wishes to extend the duration of the measure beyond that maximum period, it can re-notify the measure.

Aid in the form of reductions in taxes or parafiscal levies

Like the 2014 guidelines, the 2022 guidelines mention the possibility of aid in the form of reductions in taxes or parafiscal levies. [3] Section 4.7 covers aid in the area of environmental protection in the form of reduction in taxes or parafiscal levies. It is structured in two sub-sections, each of them having a distinct logic. Section 4.7.1 tackles taxes or levies which sanction environmentally harmful behaviour and therefore aim to direct undertakings and consumers towards more environmentally-friendly choices. Under Section 4.7.2, Member States may choose to encourage, by means of targeted reductions in taxes or levies, undertakings to change or adapt their behaviour by engaging in more environmentally-friendly projects or activities.

Possible problematic issues

According to the Commission, the guidelines provide a flexible framework and help Member States provide the aid needed to achieve the objectives of the European Green Deal in a targeted and cost-effective way. The Commission aims at helping Member States meet EU energy and climate targets, at the least possible cost for taxpayers and without undue distortions of competition in the Single Market.

In some respects, the Commission is indeed increasing flexibility and simplifying some of the previous rules (including by removing the requirement for individual notifications of large green projects within aid schemes previously approved by the Commission). The guidelines will apply to any decision taken by the Commission after their adoption. Member States will be required to align existing schemes to the new rules as of 2024. The statement „will be required to align” is problematic in terms of the role and legal status of the soft law and could further deepen the debate on the role of the Commission and the soft law.

The new guidelines retain both the minimum standard of 20% for tax reductions – which is criticized in the legal literature[4] – and the vague, overly general concepts of the previous guidelines (for example "substantial increase in production costs" or "important sales reductions", "cost that cannot be passed to the consumers", "significant competitive disadvantage") remain unclear.[5]

The process

The Commission, in its Communication of 21 December 2021, stressed that the new Guidelines on State aid for climate, environmental protection and energy are based on an evaluation of the existing rules, the Energy and Environmental State aid guidelines and a study carried out by external consultants. The Commission emphasized that it also carried out an extensive consultation of all interested parties on the proposed revised rules which yielded more than 700 contributions. The process has involved Member States, business associations, interest groups, individual companies, NGOs and citizens. In the autumn of 2020, the Commission also launched a European debate on how to ensure that competition rules and sustainability policies work together in the best possible way. The contributions received have also fed into the new Guidelines. The review also reflects the Commission's experience stemming from its case practice in recent years.

While it is true that the Commission has consulted Member States on several occasions during the phase of elaboration of the new guidelines, this process still does not remove the tension between the non-binding legal nature and the real effect of non-binding EU documents.

Concluding thought

The Commission's latest efforts on legal certainty and environmental protection objectives are to be welcomed, but the rise of soft law and the question of its legal status may give rise to concerns about the division of competences.


Author: Krisztina Széles, PhD Student, University of Debrecen, Marton Géza Doctoral School of Legal Studies



European Commission: State aid: Commission endorses the new Guidelines on State aid for Climate, Environmental protection and Energy. Press release, 21 December 2021, Brussels. Available:

Communication to the Commission: Approval of the content of a draft for a Communication from the Commission on the Guidelines on State aid for climate, environmental protection and energy 2022. Brussels, 21.12.2021 C(2021) 9817 final. Available:

Daniel Pérez Rodríguez (2016): Electricity Generation and State Aid: Compatibility Is The Question. European State Aid Law Quarterly, Vol. 15, No. 2, 207 - 227, 215-221

Jerónimo Maillo (2017): Balancing Environmental Protection, Competitiveness and Competition: A Critical Assessment of the GBER and the EEAG. European State Aid Law Quarterly : EStAL; Berlin Vol. 16, No. 1, 4-10.


[1] See the sections 3.1, 3.2 and 3.3.

[2] See point 76.

[3] See point 16 and section 4.7.

[4] See  Jerónimo Maillo (2017): Balancing Environmental Protection, Competitiveness and Competition: A Critical Assessment of the GBER and the EEAG. European State Aid Law Quarterly : EStAL; Berlin Vol. 16, No. 1, 4-10., valamint Daniel Pérez Rodríguez (2016): Electricity Generation and State Aid: Compatibility Is The Question. European State Aid Law Quarterly, Vol. 15, No. 2, 207 - 227, 215-221.

[5] See section (point 302) and section (point 308).

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