New modifications to the VAT Hungarian Act

Budapest, 6 September 2019

The Hungary’s Parliament issued new amendments to the VAT Act with respect to tariff headings and SZJ numbers. They are compliant with the EU Commission Regulation (EU) 2017/1925.

In essence, the invoices issued by the Hungarian taxpayers must contain tariff headings as they are valid starting with 1 January 2018 and TESZOR’15 numbers (if the taxpayer decides to provide such data).

The changes will not affect the substance of tax liabilities or any provisions of the VAT Act.

According to the governmental analysis, the sharing economy is competing with the traditional services: in transportation, it currently involves one fifth to one fourth of drivers while in accommodation, it accounts for up to one half of the total number of beds. There are currently certain limitations and constraints on such services that resulted in numerous litigations and complaints in Czech Republic and abroad.

Certain relevant issues are proposed for debate: earnings limit should be set (on a turnover or time basis) making it possible to clearly distinguish between “extra earnings” and a business activity or the tax administrator’s lack of information should be supplemented by using data recorded by intermediaries on payments between the service providers and users.