ADVERTISEMENT

Hungary says to change VAT rules incompatible with EU law

Issues

Hungary's National Economy Ministry on Friday said it would change VAT rules the European Court of Justice said were incompatible with European Union law in a ruling in July.

The ministry said it would submit to the government a proposal to repeal part of the existing law and work out a new procedure for reclaiming VAT that cannot be reclaimed under the rules at present.

The ministry said already in July, after the ruling was announced that it would submit changes to the VAT regulation in question to the government as soon as possible.

The European Commission said in March 2010 that it would refer the VAT regulation to the European Court after Hungary's government failed to take timely action to modify it.

Hungary's VAT legislation grants taxable persons the option to choose between carrying forward their excess VAT (which results from deductible VAT exceeding payable VAT in a tax period) to the next tax period, or immediately claiming a refund for it.

However, the reimbursement of excess VAT cannot be claimed on the basis of input VAT charged on a purchase that has not yet been paid for by the taxable person. As a result, taxable persons whose tax returns consistently show "excesses", are de facto obliged to carry forward the excess input VAT into the following tax period, the European Court said.

ADVERTISEMENT

IMF raises Hungary 2021 GDP growth forecast to 7.6% Analysis

IMF raises Hungary 2021 GDP growth forecast to 7.6%

Parliament approves amendment to Competition Act Parliament

Parliament approves amendment to Competition Act

New CEO announced at Codic Hungary Appointments

New CEO announced at Codic Hungary

Budapest bike-sharing scheme boasts record ridership City

Budapest bike-sharing scheme boasts record ridership

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.