Hungary Introduces Stricter Rules for Import VAT Deduction
New regulations introduced on March 1, 2025, in Hungary will make it more difficult for indirect customs representatives to claim the right to deduct import VAT on behalf of importers. Both parties must now meet specific conditions for the deduction to be allowed.
For importers
To assign the right to deduct import VAT, importers must meet two key requirements:
1. Monthly VAT returns
Importers must file VAT returns monthly and confirm this in writing to their indirect customs representative.
2. Taxpayer classification
- Reliable taxpayers: Deduction allowed (must have at least 3 years of continuous operation).
- Risky taxpayers: Deduction not allowed.
- Normal taxpayers: Deduction allowed only if a partner (risk) verification confirms no tax risk.
New importers, by default, cannot qualify as reliable taxpayers and are therefore excluded from assigning the deduction.
Partner verification
If the importer is not classified as reliable, the indirect customs representative must carry out a partner verification. This involves:
- Using public data and tax authority databases.
- Collecting information from the importer.
- (With consent) Requesting confidential data from the tax authority via the Client Portal.
The verification process is not legally defined, but guidance recommends a thorough review. The customs representative is responsible for determining the scope.
For indirect customs representatives
They must also meet certain requirements:
1. Reliable taxpayer status
Only representatives with reliable taxpayer status can handle VAT deduction assignments.
2. Additional administrative requirements
They must:
- Submit partner verification results via the KVKPELL form on the ONYA portal.
- Include supplementary declarations with their VAT return.
Summary
These new rules are designed to ensure better compliance and limit VAT fraud. Businesses involved in imports should now be reviewing their status and processes accordingly.
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