tag: VAT

Sometimes less is more

Tamás Fehér | 28 March 2018

Our traditional survey again looks at how many types of taxes there are in Hungary. The number of Hungarian taxes has fallen by one again this year, so we’ve counted 58 this time. The decrease, however, is of a technical nature only, while at the same time we continue to live with taxes such as the seemingly ineradicable charge payable on household employees or the newly introduced poster tax.

VAT on public-purpose investments: property developers can breathe a sigh of relief

Tamás Fehér | 2 October 2017

In 2009 the Supreme Court made it clear that the VAT on public-purpose investments related to property developments is deductible if it would not be possible to implement the development without such investment. Recently, however, some alarm was unexpectedly caused by the preliminary opinion of the advocate general of the European Court of Justice (ECJ) in a similar, Bulgarian case, which recommended prohibiting the tax deduction right. Although the ECJ’s judgement published in the middle of last week did not follow the advocate general’s opinion, it did make exercising the deduction right subject to some strict conditions.

Exactly what it seems

Tamás Fehér | 19 April 2017

One of the most frequent areas of dispute between the tax authority and taxpayers relates to the conditions under which a taxable entity participating in a chain transaction can deduct the VAT passed on to it. The tax authority (NAV) was recently struck another blow in the tussle when the Supreme Court, in a precedent-setting ruling, took issue with the tax authority’s practice of regularly reclassifying the participants in chain transactions as agents. What’s more, the Curia’s ruling goes significantly further, and questions in general the tax authority’s right to reclassify the transactions of taxable entities on a whim.

Still too many...

Tamás Fehér | 27 March 2017

In our traditional beginning-of-year review, we again counted the number of taxes levied in Hungary today. This time we got 59. Although the number of taxes has decreased by one since last year, the scale and structure of the tax system has not changed. In terms of tax revenue generated, VAT continues to top the list, bringing in approximately HUF 3,300 billion in 2016.

End to an unjust fine?

Ádám Fischer | 3 March 2017

Under current practice the Tax and Customs Administration (NAV) fines taxpayers that are caught with a VAT shortfall even if the budget has sustained no losses. An opinion recently published by the Advocate General of the European Court of Justice could spell the end for this extremely unfair and much criticised procedure.

Tags:
EU, tax penalty, VAT

Last nail in the coffin for the tax authority

Ádám Fischer | 29 November 2016

In its latest decision, the European Court of Justice (ECJ) has ruled that the Hungarian tax authority (NAV) unlawfully refused to allow VAT deduction to taxpayers who could not have known that the invoice’s issuer was implied in tax fraud. A special twist in the so-called Signum case is that it was the court of first instance who referred the case to the ECJ, as opposed to the guidelines of Hungary’s supreme court. The decision will have a significant bearing on ongoing tax audits and tax-authority findings, especially in the agricultural and trade sectors.

Tags:
EU, tax audit, VAT

More than a lot

Tamás Fehér | 22 June 2016

According to our calculations there are presently 60 taxes in force in Hungary. Value added tax accounts for 25% of central tax revenues whereas the personal income tax accounts for 13%. However, most taxes account for less than 1% of these tax revenues. The figure of 60 different taxes seems slightly excessive also in an international context.

A lease may not always be a lease for VAT

Tamás Fehér | 16 March 2015

Lease services often lead to uncertainty from a VAT perspective. Some services which seem like lease at first glance do not meet the criteria for “lease” for VAT purposes. The improper classification can lead to surprises: on the one hand the lessor’s deduction right can be challenged, on the other hand a seemingly VAT-exempt transaction could trigger VAT liability. A recent ECJ decision will set standards for these situations.

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The law is constantly in flux. While many people may find this intimidating, for us it’s precisely what makes it so exciting. We’d like to share this attitude with businesspeople and managers, and with those who just have an interest in business law, in the form of a regularly updated blog that discusses the latest tax law and commercial law issues in an accessible style. Feel free to send your questions and suggestions for topics you’d like us to cover to blog@jalsovszky.com.

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