Page 4 - 20140114_PS-Newsletter_On-Changes-of-Taxation

PS Newslett er

14 January 2014

As for the latter, a subsequent reduction of the tax base Tax return template
is only allowed on condition that the refund is given as Taxpayers not applying for tax exemptions will be allowed
consumer incentive in line with the business policy of to use a single unified template return when filing for their
the company, and that the refundable transaction does obligations. (Previously, individual templates created by
not take place between the company and the consum- local authorities had to be used.)
er directly. Moreover, the transaction should be taxable Filers subject to local tax or tourism tax will also be able
in Hungary and the refund itself should not exceed the to use the template for registering and status change
value of the base transaction. According to the law the reporting purposes.
amount refunded has to be regarded as it includes the
amount of tax as well. Electronic submission of these template returns will only
be possible if local regulations support such method of
Fixed assets and intangible assets filing.

The law will extend the definition of fixed assets – with- Splitting of the local business tax base
in the framework of the VAT system – to cover intangible
assets, too. Therefore, taxpayers subject to proportional From 2014 the tax base splitting method to be applied
tax deductions will have to apply the monitoring period of by wireless telecommunication service providers will
be amended. 20% of the tax base will have to be split
5/20 years already applicable to fixed assets also to intan-
gibles such as software, and rights to immovable. Only between the registered seat and the locations of perma-
nent business establishments (e.g. office, shop) accord-
rights acquired from 2014 will be subject to the new rules ing to the general rules, while the remaining part of the
– however, the taxable person can also decide to apply tax base will have to be split between the settlements,
the new rules retroactively to rights acquired prior to 2014.
where the billing addresses of customers are located.
VAT exemption of exports As a result, a bigger portion of the tax base will be allo-
cated to the location of the registered seat and larger
According to a unique Hungarian VAT regulation – business settlements.
currently being challenged by the European Court of
Justice –, VAT exemption of exports to third countries VI Stamp duties
depends on a deadline: the product should leave
the territory of the European Union within 90 days of Elimination of unfavourable duty liability
declaration. The amendment will offer practical solutions
for the VAT treatment of deliveries made after this Unfavourable duty liabilities arising due to the transition-
al rules of certain amendments introduced at the begin-
deadline. In case the goods exit the EU after 90 days, ning of 2013 will be eliminated.
the seller will have to issue an invoice with VAT and pay
the tax amount as before. However, should the product Thus, if the duty levied under the new rules on acquisi-
manage to leave the territory of the EU within 360 days, tions reported in 2013 is higher than it would have been
the seller will be entitled to correct the previously issued under the former rules, then the levels set out in these
invoice and to reclaim the VAT amount paid. latter rules should be applicable. Differences which had
already been settled will be reimbursed.
Reverse charge Waiving dividends
The application of VAT reverse charge mechanism for
certain agricultural products (namely for cereals and oily It has been clarified that the waiving of dividends and –
under certain conditions, during winding up proceedings
seeds) will be prolonged until 31 December 2018.
st
– the cancellation of receivables is exempt of gift duty.
Receipts
Stricter requirements for gift duty exemption
It will be possible to issue receipts electronically. More- Stricter requirements will have to be satisfied for the duty
over, the requirements for treating entrance tickets as exempt treatment of assets transfer without considera-
receipts will be simplified. tion, cancellation of receivables and takeover of liabili-

V Local tax ties between business entities. The exemption will not
be available if the beneficiary is registered in a country
Local business tax advance of newly in which the CIT rate or the effective tax rate is less than
established entities 10% or where the income arising from the sale of shares
is not subject to at least 10% tax.
It has been clarified that taxpayers without a legal prede-
cessor are exempt from advance payments for the first Real estate holding company
advance payment period only – instead of the entire start The definition of a real estate holding company will be
up tax year. amended to correspond with the definition employed

On changes Of taxatiOn 4