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Hungary anti VAT fraud measures

  • May 12, 2014 | Richard Asquith

Hungary anti VAT fraud measures

The Hungarian government is stepping-up measures to combat the growing problem of Hungarian VAT fraud. Since increasing the Hungarian VAT rate to 27%, there has been a marked increase in fraudulent activity, and drop-off in revenues. The OECD states that VAT fraud typically becomes a major problem for countries once the indirect VAT tax rises above 10%.

The current Hungarian VAT measures include:

  1. Extended the use of the VAT reverse charge provision to a number of sensitive industries
  2. Reclassified a number of categories of goods subject to fraud to lower VAT rates e.g. raw meats
  3. Separate declarations in VAT returns for invoices about HUF 2 million
  4. Increased the powers of the VAT inspectors to seize cash and assets of non-compliant taxable persons
  5. Made online cash registers compulsory so there was direct reporting of cash receipts to the tax authorities

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.