During the state of emergency there were numerous taxation related measures in the form of government decrees to alleviate the economic damage caused by coronavirus epidemic. We informed you about these measures through newsletters week by week. In this newsletter we would like to draw your attention for those measures which were determined in government decrees and now becomes the part of the tax system as a consequence of publishing them as law in unchanged form or with slight modification. In the second part of the newsletter we inform you about the actual changes in online invoicing.
According to the new legislation published on 9 June, the special retail tax which was introduced by a government decree during the state of emergency and originally planned to be a temporary tax becomes to be permanent. The special retail tax must be paid with a progressively increasing tax rate by domestic or foreign taxpayers who carry out retail activity and their net revenue exceeds HUF 500 million.
The regulation qualifies as retail activity the activities under NACE codes 45.1 (except for wholesale trade in vehicles and trailers), 45.32., 45.40 (with the exception of wholesale trade and repair services of motorcycles) and 47.1 – 47.9.
The tax liability applies to the retail activity, and covers all transactions where a domestic or a foreign person or entity carries out retail activity in a business-like manner, including the case, where a foreign-registered person sells goods to its customers via channels other than branch office in Hungary.
The base of the special retail tax is the net revenue (defined in the decree) arising from the retail activity. In certain cases, the net revenues of the related companies shall be aggregated, and progressive tax rate should be applied for this sum to calculate the tax amount. As a result, the related taxable persons bear the calculated tax burden in proportion to the taxable income.
The tax rate is determined as follows:
Taxpayers must record and pay tax advances. The filing deadline of the yearly tax return is 31 May and the amount of the tax should be paid by this date (if the tax advance paid earlier is more than the amount of the tax, the difference might be recovered from this date). As the legislation entered into force during the year, it contains special rules for the first taxyear. Those taxpayers who are not obliged to pay tax do not have to file tax return.
As we informed you earlier, after the change in the scope and structure of the data covered by online data supply obligation, as of 1 July 2020 data should be supplied on every invoices which has been issued for domestic taxpayers.
According to the informative of the Hungarian Tax Authority, default penalty will not be imposed if taxpayers do not fully perform the data supply obligation in terms of incoming and outgoing invoices with VAT content less than HUF 100.000 or supply the necessary data within 5 instead of 4 days in terms of handwritten invoices which VAT content reaches HUF 100.000 but not exceeds HUF 500.000.
The above moratorium regarding invoices which VAT content does not reach HUF 100.000 also applies to those taxpayers who had online data-reporting obligation before 1 July 2020.
Taxpayers who have no had online data-reporting obligation so far in order to be exempted from the sanction must register in NAV Online Invoicing System no later than the date on which the first invoice which is affected by online data-reporting obligation is issued.
In line with the above, the domestic summary report also expands, all incoming invoices issued by domestic taxable persons should be reported if the taxpayer exercises the right of deduction regarding the invoices.
This document can be downloaded in PDF format by clicking on this link: Tax changes after the state of emergency