The main modifications to the Act on Excise Tax effective as of 1 January 1997 were as follows:

1. In the case of sales from compulsory reserve stocks, the taxpayer is obliged to pay excise tax on the day of the withdrawal.

2. The range of products which can be purchased tax free will no longer include products which are utilised for the production of oil derivatives, except for utilisation during oil processing.

3. Only entities with no public debts will be entitled to obtain goods tax free.

4. The excise tax on oil products, alcohol, alcoholic beverages, beer and cigarettes will increase by an average of 14.4%.

5. A number of products, including chocolate, cosmetics and silver jewellery will no longer be subject to excise tax In the case of precious metals and coffee, the excise tax has been reduced by 50%.

6. The percentage proportion of the excise tax payable on most alcoholic beverages (with the exception of beer) will cease, only the fixed tax rate will apply.

7. The amount of the environmental fee on petrol will not be increased, however, in future, it must be paid in accordance with the provisions of the Excise Tax Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

If you require any further information on Hungary, please call Peter Gerendasi at Price Waterhouse, Budapest: tel: ++ 36 1 269 6910 fax: ++ 36 1 269 6938
E-mail: peter_gerendasi@europe.notes.pw.com
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