Are you sure that your intra-Community supply is tax exempt? What documents are required to prove?

As a result of the free movement of goods and globalization, companies sell products to othermember states of the European Union countless times as part of their economic activities. Under certain conditions, intra-Community product sales may be tax-exempt under the Hungarian VAT Act, in accordance with the EU VAT Directive. One of these conditions for tax exemption is that the product is delivered to another member state. Nevertheless, this fact itself is not sufficient, but it must also be proven in the case of a tax audit. In this article we focus only the transportation and the related evidences as part of the legal conditions of the tax-exempt intra-Community transaction, and we do not investigate the further settings.

The Global M&A tax guide has been published

LeitnerLeitner as the a member of Taxand which is the world's largest organisation of independent tax advisory firms, participated in the editing of the Global M&A Tax Guide. It is about local tax rules and developments relating to mergers and acquisitions.

Extra-profit taxes

 The Government of Hungary will introduce an extra-profit tax from 1 July 2022.

VALUE ADDED TAX IN HUNGARY

Value added tax for entities is a pure flow-through, transitory item. Nevertheless, non-deductible pre-tax, falsely assessed VAT and penalties deriving from administrative mistakes can heavily burden the entities’ budget, especially in a country with the highest VAT rate (27% general rate) within the European Union. In the following guideline we will introduce the main principles of the Value Added Tax in Hungary.

Recent tax changes

The following overview addresses recent changes introduced this year so far.

Tax package 2021 June

 As a closing of the spring session, the Hungarian Parliament adopted and promulgated on 9 June 2021 the latest tax package, which essentially contains changes to the tax law for 2022 and partly for 2021. The following addresses the most significant changes.

M&A in the pandemic

During the last six years of economic growth, the number of insolvency proceedings in Hungary has reduced. As a result of the coronavirus epidemic, however, the positive trend is likely to reverse from the second half of 2020 and even more so from 2021.

Tax changes 2021

In the following we focuses on the most important recent tax related law changes. Further amendments are expected with respect to accounting, car tax, excise tax, etc.

Tax changes autumn 2020

The following recent law changes at this point in time, the amendments shall be understood as a guideline for future changes, and not a reference. The final version of the new rules is awaited in the coming days. The following focuses on the most important rules. Further amendments are expected with respect to accounting, car tax, excise tax, etc. After the official publication of the tax law modifications, we will inform you on this latest package in more detail.

Timing is everything – in generation change too

Making plans belongs to mankind. We prepare shopping lists, holidays, meetings, budgets. Even it seems that we like things being organized, there are areas where planning might be already in mind; however, taking the decisive steps are awaiting.

Wage subsidy for R&D personnel

R&D wage subsidy may be granted ex post on a monthly basis provided that the following requirements are met:

Postponement of deadlines for financial statements and yearly-taxes

The Hungarian government has further eased the following tax and accounting provisions:
 

Retailer surtax based on last year’s turnover!? Is there a solution?

The Hungarian Gazette of Tuesday, 14 April 2020 published a decree on the surtax of retail industry. The surtax may result in a significant overtaxation due to the fact that the basis of the advance payment liability is the turnover data of the previous business year based on the decree. Practically, this is the update of the former Hungarian act of 2010 on sector-specific taxes as both the object and the tax rate are the same as in the old act.

Financial measures related to Covid-19

There are several financial measures in order to ease the financial situation of the population and companies.

Relief in tax administration

In addition to reducing costs for companies, facilitations in ​​tax administration have also been introduced.

State support to salaries

If the wages of employees working in shorter time are supplemented by the state, workers will get better out of their revenues while companies can retain their employees.

Surtaxes levied to finance the economic package

Surtaxes are intended to make up for missing revenues and to cover increased expenditures.

Rules related parenting

Due to the coronavirus epidemic, special rules have been introduced to alleviate the situation of parents raising children.

Flexible labour law provisions

As part of the protection package, the rules of working time banking become even more flexible.

Covid-19 related tax measures in Hungary

A number of tax measures have been introduced to reduce the effects of the economic crisis caused by the coronavirus epidemic.