Hungary’s new VAT law, which came into force in January of this year, failed to lay down certain key provisions, as a result of which some non-Hungary-based taxpayers can no longer reclaim VAT, busines daily Napi Gazdaság reports.
The companies most heavily impacted are those dealing in software licenses in Hungary but have no official operations in the country.
According to the paper, while some legal corrections have since been made, these have not fully solved the issue.
Previously, the law stipulated that the ability to reclaim VAT began when the invoice was issued. According to the new regulations, the date of the actual settlement is what counts.
This means that if – for instance, due to an technical error – a business is required to make corrections to an invoice it issued and settled in the previous year, it can no longer reclaim the value added tax for it.
But as Deloittle tax associate Márta Pénzely has pointed out, although the tax authorities recently took steps to rectify this issue, the problem has been only partially solved, because the new law only accounts for cases in which the invoice correction involved a change in the sum payable.
For any other technical errors, such as a wrong bank account number or address, the issuer is still not entitled to get the VAT back.