In its judgement passed a few weeks ago, the treatment of European Court of Justice (ECJ) was flexible in the interpretation of the VAT “triangular transactions”. While this decision in favour of the taxpayer creates a tax planning opportunity for businesses involved in international trade of goods, it pays off to be cautions on the other side.

Venture capital funds financed partly or entirely with government money have been all the rage in the equity markets these past few years. Initially the Jeremie funds pumped capital into the market in four successive rounds, but as the placement period for this scheme ended, the first solely state-owned venture capital investor also entered the market. And from this year on, new venture capital funds with EU money at their disposal are coming on stream, as well as a state-financed equity fund is set up to assist ventures with potential for future stock exchange listing.

Companies are faced with countless situations where, for reasons beyond their control, they are unable to collect the money owed to them, including its VAT part. In such cases the tax authority often refuses to allow the reclaim of the lost VAT even where this would not incur a loss for the budget. Based on recent judgements by the European Court of Justice (ECJ), however, the VAT should be recoverable in many cases of this kind.

Based on a recently announced EU directive, your name and any tax advice you have received could end up with the tax authority. From July 2020, tax advisors, or in certain cases the taxpayers themselves, will be required to inform the tax authority of the details of certain tax planning structures that are classified as aggressive under the new directive. And what’s more, the disclosure obligation will apply retrospectively to all structures that taxpayers started implementing after 25 June 2018.

The popularity of simplified, or “small” business taxes (KATA, KIVA) grows unabated, with thousands of engineers, computer programmers, hairdressers and lawyers opting for one or other of these schemes. Meanwhile, few are fully aware of the risks that these types of tax can entail. The potential consequences are measurable in hard tax forints and penalties, both for payers of these forms of tax and for the businesses that provide their income.

Due to a seemingly trivial error, a series of NAV decisions are being overturned in court: a good many of them don’t contain the proper signature. This procedural error, however, could be useful not only in ongoing lawsuits, but possibly in past, closed procedures too – hundreds of businesses could claw back the tax forints they thought were lost for good.

Following the recent reinterpretation by the European Court of Justice (ECJ) of the definition of closed-end finance leasing, a new Advocate General (AG) opinion has exploded another “VAT bomb” in relation to current practice. For many years, leasing companies have divided the fees payable under finance lease contracts into a VATable and a non-VATable part, but the latest AG opinion states that the whole lease fee should be liable for VAT in its integrity. This could have serious implications for the Hungarian leasing market too, so it is worth keeping an eye on how the case progresses.

The new Civil Code that came into force a couple of years ago broadened the autonomy of companies, which are now free to shape their internal organisation and operation to their own needs. Nevertheless, there are still several lesser-known, rigid company-law rules that, if ignored, can entail severe legal and financial consequences.