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Reverse taxation could bring up to HUF 1.5bn per month in tax revenue in farming, says Matolcsy

Cereals, oil seeds, live poultry and hogs, and poultry meat and pork could be the farming products where the introduction of reverse taxation could yield positive results, namely additional budget revenues between HUF 1.2bn-1.5bn per month, Matolcsy said in response to a written question by a Member of Parliament.

The reply has been published on the website of Parliament on Wednesday.

The minister confirmed that reverse VAT is an appropriate tool for fighting VAT fraud.

Reverse taxation means that the VAT is not charged by the seller but will be paid to the central budget by the buyer.

The minister notes in the letter that the extension of the range of products falling under reverse taxation over certain farming products can only be introduced for a temporary period and requires authorisation from the European Council, which means that Hungary must apply for a derogation to the European Commission.

Prime Minister Viktor Orbán announced in Parliament on September 12 as part of the national protection plan that Hungary wishes to introduce reverse taxation in the farm sector and has begun consultations with the European Commission on the matter.