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Hungary tightens on VAT compliance inspections


Hungary tightens on VAT compliance inspections

The Hungarian VAT authorities have this week issued detailed plans for stepping up VAT audits and inspections in the forthcoming year. Hungary has faced extreme problems with loss of VAT revenues in recent years due to VAT fraud. This is partly because is has the highest VAT rate, 27% in the European Union.

The National Tax and Customs office has said that it will pay particular attention to the following areas:

  • VAT cash accounting compliance, where the company under review has been given authorisation
  • The application of the VAT reverse charge, whereby the supplier does not charge VAT and the purchaser accounts for both the input and output VAT
  • Sales (Despatches) and Purchases (Arrivals) of goods from other EU member states. This trade, known as Intra-community trade is nil rated for VAT, but has been subject to major frauds.
  • Online retailers selling to consumers in foreign countries
  • Specific high-risk industries, including: trade in meat; supply of manpower; professional services; private health care and dentistry; and trade in commodities

The above details were published on 5 February 2013.


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 this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.