From 1 January 2020, the European VAT regulations will be standardized in several areas to simplify and standardize VAT management on the ground of sale of goods within the EU.
The National Tax and Customs Administration (“Authority”) has presented its vision for the future at a taxation conference held at the end of November 2019. The Authority has outlined that the emphasis will continuously be on the tax inspection of companies alongside with seizing the benefits of digitalisation and development. The principal objective of the Authority is to promote and enforce compliance with legal obligations. This objective will be supported by a new obligation (applicable as of July 2020) that requires taxpayers to provide complete data on their invoices.
The European Commission’s aim is to simplify VAT obligations for companies carrying out online cross-border sales of goods or services to final consumers and to ensure that VAT on such supplies is paid correctly to the Member State of the customer, in line with the principle of taxation in the Member State of destination. As a next step of this goal, the European Parliament (EP) adopted the new VAT e-commerce package, which planned to be applicable from 2021. This package will combat VAT fraud and ensure fair competition for EU and non-EU businesses.
At the beginning of December 2019, the Hungarian Parliament accepted an amendment to the Hungarian Duty Act, which is supposed to enter into force on 1 February 2020.
Affiliated enterprises have to report their related undertakings in a Country-by-Country (furthermore “CbC”) report until 31 December 2019 for the financial year of 2018. The information therein is used for high level transfer pricing examination and risk assessment. If a company fails to comply with the deadline mentioned above, it may expect a default penalty up to HUF 20 million (~ EUR 60,420) from the Hungarian Tax Authority.
The autumn tax package was submitted to the Hungarian Parliament on 12 November 2019. The new legislative proposal recommends to combine four types of contributions – i.e. the pension contribution, in kind and financial health insurance contributions and social contribution – into one single social security contribution.