Spectator on facebook

Spectator on facebook

BBJ - BUDAPEST BUSINESS JOURNAL

VAT rules to change May 1

THE EASING of the cash flow burden placed by value-added tax (VAT) on intra-community trade and imports from outside the EU; a hike in administrative tasks for local companies; the introduction of a new VAT grouping scheme; positive changes in VAT regulations concerning call-off stock. These are among a slew of changes to the law on VAT passed by the Hungarian Parliament early March.

Lawmakers also reversed a regulation obliging foreign consignment stock companies to establish branch offices or subsidiaries when serving clients from Hungary.

The amendments will mostly take effect upon EU accession on May 1.

"The new VAT law brought in several unexpected positive changes," Róbert Heinczinger, tax partner at Ernst & Young Advisory Kft, said last week.

"Despite its shortcomings, the new law reflects the lawmakers' efforts to improve Hungary's competitiveness in the EU," commented Regina Simon, tax manager at rival KPMG.

Amongst the positive changes, Simon noted that importers no longer have to finance the VAT on all imports from their cash flow. From May 1, local companies involved in intra-community trading - trading within the EU - do not have to pay VAT in advance on products brought in from within the community.

Financial service providers, banks, and insurance and investment companies will have the opportunity to form a VAT group with their outsourcing subsidiaries. Transactions between members of such groups will be exempt from VAT.

According to Simon, the new VAT grouping scheme will increase cost efficiency in the financial sector, but it is only a small step toward making Hungary a regional financial centre, as it lacks a real cross-border effect.

The Slovak Spectator edited these articles for length and style

Top stories

Slovak scientist in the US: Slovak science needs more than just money to thrive

It seems as if we do not want skilled scientists to return home, says Dominika Truban, who founded a platform connecting Slovak researchers abroad and at home.

Dominika Truban

The Education Ministry to restore the analytical institute

The institute that is part of the Value for Money initiative was merged with another body at the beginning of the year.

Education Minister Martina Lubyová

New web app shows property owned by politicians

The aim is to clearly show publicly accessible information about public officials that is scattered through various state websites and registers.

Zsolt Simon

Blog: Helping others helps your company too

Tatiana Čaplová, Program Coordinator for CSR at the Pontis Foundation, offers a very interesting look behind the scenes of the most successful CSR event in Slovakia - Naše Mesto (Our City).

Bratislava