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Hungary coronavirus VAT measures

  • Nov 18, 2020 | Richard Asquith

18 Nov - take away and home-delivered food and drinks has been moved to the 5% reduced VAT rate from 14 Nov 2020 until 8 Feb 2021

8 Oct - the government has announced a temporary cut in VAT rate on housing to 5% until 31 December 2022. This is to help the construction sector during the COVID-19 crisis. This is a reduction from the standard VAT rate of 27%. Hungary had previously applied a reduced 5% VAT rate on construction between 2016 and 2019.

1 May - Hungary has introduced today a COVID-19 emergency bank tax. The tax is an additional one-off charge on top of the existing banking tax. The tax is calculated as 19% of the net balance sheet in excess of HUF 50billion.

28 April - shortened the VAT credit period from 75 days to 30 days for small and medium sized businesses (SME). For VAT payers with a good track record of compliance, this will be further shortened to 20 days. In Hungary, SME is defined as: below 250 employees; turnover below HUF 18million per annum; or a balance sheet net total below HUF 15million.

21 April - Hungary is to launch a 2.5% retail turnover tax 1 May for the duration of the COVID-19 crisis.

Update 27 March:
Hungary has delayed the update of its live invoice reporting schema, from 1 April until 1 July 2020.

The Hungarian tax and customs office has issued notice of tax payment deferrals following the spread of the COVID-19 virus. The measures mostly target individuals. However, businesses may apply for tax (including VAT) payment deferrals. But there is a HUF10,000 administrative fee.

The measures for tax and associated penalties and interest include:

  • Postponement of tax payments
  • Step repayment schedule
  • Tax forgiveness

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara
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