On 4 June 2019, the so-called summer tax package was submitted to the Hungarian Parliament. The package mostly aims at implementing various EU directives.
The new rules will, inter alia, cover the following:
- exit taxation to prevent companies from avoiding tax when relocating assets, business operations or their place of effective management from Hungary;
- rules addressing hybrid mismatches which will result in a deduction being denied to avoid deduction/non-inclusion and double deduction outcomes;
- new VAT rules for call-off stocks and chain transactions;
- a regime providing relief from VAT on bad debts with a view to a decision of the ECJ (case C-246/16 – Enzo Di Maura);
- a procedure enabling customers to recover unduly invoiced VAT from the tax authority in instances where they would otherwise not be able to reclaim such VAT in light of two judgments of the ECJ (cases C-564/15 – Tibor Farkas and C‑691/17 – PORR Építési Kft.); and
- a 0% rate for tax on advertisement turnover between 1 July 2019 and 31 December 2022 instead of the currently applicable flat-rate. To this end, we note that in the recent decision of 27 June 2019, the General Court annulled the Commission's decision finding that the Hungarian advertisement tax was incompatible with the EU State aid rules.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.