Amended law reduces VAT on some agricultural products, limits exemptions

Banking

Amendments to VAT legislation taking effect on January 1 have reduced the VAT rate on the sale of cattle, sheep and goats, both live and in processed form, to 5% from the general rate of 27%. The VAT rate for pigs and pork products had been reduced to 5% earlier.

VAT paid in motor fuel purchases will be deductible if the fuel is accounted as a direct material expense which is part of the tax base of the product sales.

Reverse VAT rules now apply to labour and personnal lending arrangements tied to construction, and reverse VAT rules applying on some steel product sales transactions were clarified.

Portfolio management of financial assets now are liable to VAT, except for the management of insurance technical reserves which remain exempt from VAT.

As a change to accounting rules, invoices with a VAT value of at least HUF 1m will now have to be displayed in the summarizing report. The limit was lowered from HUF 2m. The tax identifier number of the customers will also have to be shown on the receipts.

Among other changes, newly formed companies will now have to submit monthly tax reports until the last day of the tax year after the calendar year of their establishment. Previously they only had to submit quarterly reports. In some other cases companies making yearly reports will now have to submit quarterly ones.

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