Due to the practical difficulties created by the lockdown measures taken against the coronavirus pandemic, the European Council has agreed that the VAT e-commerce package should apply from July 1, 2021, rather than January 1, 2021.
Final guidance on transfer pricing aspects of financial transactions is published
On 11 February 2020, OECD published a final guidance on transfer pricing aspects of financial transactions as part of the relevant BEPS action plans. This report has a significant importance, since it is the first time that the guidelines include rules for financial transactions.
In February 2020, the Council of Economic and Financial Affairs (Ecofin) adopted new rules to facilitate detection of tax fraud in cross-border e-commerce transactions and to simplify the VAT rules for small enterprises. The new rules on the exchange of VAT payment data in e-commerce will enable the Member States to collect, in a harmonized way, the electronic data from payment service providers (such as banks).
In its judgement of 2 March 2020, the Court of Justice of the European Union (CJEU) established that Member States are free to impose registration obligation for foreign suppliers and levy penalties on foreign entities for incompliance with the obligation, even if resident entities are exempt from that obligation. The judgement, however, also contains that the Hungarian legislation is disproportionate and as such, it is incompatible with the EU rules.
Hungarian online invoice data reporting obligation is set to be extended practically to all invoices by 2021 in two steps. Companies – for some as a totally new requirement – should be ready to allocate development capacity in order to comply with the reporting on time.
The National Competitiveness Council held a meeting on 4 February 2020 about the possible future changes of the local business tax. Mihály Varga, Minister of Finance outlined that there is a strong need for simplification and reduction of local business tax, which has not changed significantly since its introduction in the early 1990’s.