No funding recovery in Hungary, EU VAT case while procedure underway

Issues

Hungary will not have to repay European Union funding in cases involving the country's application of EU support for VAT as long as the legal procedure is underway, the National Economy Ministry said on Friday, responding to a query by MTI.

The European Court of Justice on Thursday rejected appeals by Hungary against the European Commission's stand that Hungary may not use European Union funding to cover VAT costs in a motorway construction and a railway renovation project.

The VAT costs were accounted in the construction of a 34km section of the M43 motorway, between Szeged and Makó (SE Hungary), and the reconstruction of a rail line between Budapest and Boba (W Hungary). Hungary argued in the case that the VAT costs were included because the state-owned infrastructure company could neither reclaim VAT nor include it in its bills.

Hungary has two months to decide to appeal the ruling made by the court on Thursday.

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