A recently released NAV guidance gives a list of those signs that could indicate that a security firm is involved in VAT fraud. The list will certainly help companies that accept invoices from such security firms, but it’s still a pity that the guidance wasn’t issued ten years earlier.

It has been clear for some time that Hungary is in breach of EU law by not allowing the refunding of VAT on bad debts. The fact that cases of Hungarian taxpayers have now been brought before the European Court of Justice (ECJ) has forced Hungarian lawmakers to move on the issue. While the package of tax amendments submitted last week provides an opportunity to reclaim such VAT, in certain cases – due to the planned administrative restrictions – it will still only be possible to enjoy this right with reference to EU law.

The European Court of Justice (ECJ) has declared in a recent case that when checking VAT transactions, the tax authority cannot ignore examining the full budgetary impact. Thus it is not acceptable for the authorities to deny the right of VAT deduction to a taxpayer without allowing the other taxpayer to accordingly reclaim the VAT that it paid. Furthermore, the court also found it unacceptable for the tax authority to base a fine only on the amount of the VAT deducted unlawfully without examining the tax shortfall actually caused. The ruling can be considered as another important step towards the creation of a fair VAT system.

A position statement issued at the end of last year in response to an accounting question is now coming sharply into focus for the first time. According to the statement, all holding companies are subject to an auditing obligation. Or are they?

If somebody dies unexpectedly, it’s not only a terrible loss for the grieving family and friends, but can also be a tragedy for the company of which the deceased was a member. At such times, the company can find itself unable to make decisions, even if the deceased only held a small share in the business. However, solutions do exist to enable the testator not only to make provisions for family members in the event of his or her death, but also to make sure that the company can continue to make decisions.

Thanks to the virtual mobility afforded by the internet, a growing number of people today are using online trading platforms to buy and sell foreign securities through brokers abroad. However, these investors in foreign stock markets are often gambling not only with their money, but with the tax system, too – often without even being aware of it.

In line with the models applied in the English-speaking world, the granting of a stock option to a company’s manager, or to the members of its management team, is becoming increasingly widespread in Hungary too. A stock option not only gives the manager an incentive to increase the value of the company, but after exercising the option it also creates an opportunity for him or her to have a say in shareholder decisions. The regulations related to stock options in Hungary, however, carry a good deal of tax-related pitfalls. It pays to be aware of these when devising your stock option plan.

60, 59, 58, 55… this is how the number of taxes has changed in Hungary over the past 4 years. The trend is certainly encouraging, but behind the figures there are some more complex phenomena at play.