The health product tax – although it does not only affect salty products – has entered the Hungarian public consciousness primarily as the chip tax, as a type of tax that affects foods that are legally labelled as significantly unhealthy or less healthy.
- When can products be subject to the chip tax?
For salty foods, the tax applies to products that are considered salty snacks and are baked, extruded or roasted, flavoured and suitable for immediate consumption, made from cereals, potatoes or oilseeds, if the salt content exceeds 1 gram of salt per 100 grams, but only for pre-packaged products.
However, the collective term salty snacks does not refer to the trade name or food classification of the products, but – via the tax – the customs classification is decisive here.
This means that when deciding whether a particular product is subject to the chip tax, the main thing is whether it falls into the category of taxable products according to the customs definition attached to the – general or individual – interpretation of the customs tariff numbers.
- When must chip tax be paid?
The obligation to pay chip tax therefore exists when the product a) falls into the category of taxable products under customs law b) its salt content reaches the specified level.
The customs classification of products that do not clearly fall into one of the categories based on the definition can be decided on the basis of the recipe or other legal interpretation or consultation with the customs authorities – in the case of unclear classification, a thorough procedure is important for both the tax payment obligation and for its fulfillment.
- Food composition – double quality and the chip tax
The chip tax in this form and under these conditions is a Hungarian phenomenon and its purpose is to protect health from a preventive point of view.
At the same time, the Hungarian consumer protection regulations, which will come into force in 2022, also stipulate that the same product may not be marketed in Hungary in a different quality than in other European Union countries, i.e. as a product with the same name and presentation, i.e. giving the consumer the impression of product identity, may not be of lower quality than what is marketed in other Union countries.
Violation of this provision entails the payment of a consumer protection fine, and the consumer protection “scandals” of recent years – according to which foreign manufacturers have placed lower quality products on the Hungarian market, such as in Western Europe, have come to life.
For many manufacturers, the question arises whether the product violates the regulations if it is marketed with a lower salt content in order to reduce the high salt content subject to the health product tax.
The answer also depends on the individual assessment of the product, but in general it can be said that the higher salt reduction in the product for the purpose of health protection alone is unlikely to result in a difference in quality between the product with a lower salt content and the basic product. This creates a double quality, i.e. less salt on the Hungarian market, a product marketed with a salt content can mislead consumers about the quality of the product.
Do you need advice on food law and/or consumer protection law? Please feel free to contact our law firm, our lawyers will be happy to advise you comprehensively in these legal areas as well.