According to a 2021 Government decree, companies licensed to engage in mining in Hungary shall pay additional mining fee if their net revenue in 2019 reached or exceeded HUF 3,000,000,000 (approximately EUR 7,715,000), but only the sale of graded sand, graded gravel, graded sandy gravel, natural sandy gravel and cement at a price higher than the reference price specified in the Government decree gives rise to the obligation to pay the fee. The amount of the additional mining fee is 90% of the difference between the actual sales revenue and the reference price of the quantity of product sold.
In February 2024, the European Commission brought an action against Hungary before the CJEU. It requested a ruling that Hungary had infringed the freedom of establishment by introducing additional mining fee obligations, minimum extraction obligations, and that these two measures together had the effect of restricting freedom of establishment. The Commission further requested the CJEU to rule that Hungary had infringed its obligations by not notifying certain laws to the Commission at their draft stage.
Except for the first one, the CJEU rejected the Commission's claims, citing that its legal grounds and arguments were inadequate and that it had failed to substantiate its claims. In other words, the Court upheld the Commission's claim only insofar as Hungary infringed the freedom of establishment by introducing additional mining fees.
The Court found that the additional mining fee is likely to prevent the recovery of investments made by undertakings required to pay it and therefore restricts freedom of establishment. The Court further stated that the additional mining fee obligation constitutes indirect discrimination based on the location of the companies' seats because, although the applicability of the obligation is based on an apparently objective criterion, namely the amount of revenue, in practice it applies primarily to companies whose registered offices are located in Member States other than Hungary. According to the ruling, 340 entities carry out mining activities in Hungary, of which only four are obliged to pay the additional mining fee, three of which are based abroad and only one in Hungary. Incidentally, the four companies required to pay the additional mining fee collectively hold a 25% market share in the sector. The Court therefore ruled that, in this case, net revenue serves solely to identify the undertakings liable to pay the additional mining fee, not to determine the basis for the fee.
Based on the above, the Hungarian legislator is obliged to ensure, without delay, that the rules on additional mining fees are brought into full compliance with the judgment.