29
Fri, Mar
51 New Articles

Expected changes in the Hungarian VAT reclaiming practice

Expected changes in the Hungarian VAT reclaiming practice

Hungary
Tools
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

On the basis of current practice of the Hungarian tax authority, Hungarian taxpayers are not always able to recover value added tax they pay even the Court of Justice of the European Union had stated the possibility of VAT reclaiming.

This is the case for example, when the seller charged VAT, although he would not have needed to do so (i.e. the buyer paid the VAT improperly to the seller and the seller paid VAT unnecessarily to the tax authority). The relating decision of the Court of Justice in a Hungarian case stated that, contrary to the current Hungarian practice, the buyer may reclaim the VAT directly, without attempting to recover the amount from the seller.

The Court of Justice declared the same in similar situations, for example, the VAT can be reclaimed by the customer even if a contractor not performing under an agreement and refusing paying back the advance paid by the customer, or when a claim becoming irrecoverable but the party has performed his obligation derived from the agreement (also paying the VAT). According to the Court of Justice, in such cases, VAT neutrality can only be ensured if the right of reclaiming the VAT is not denied from the customer/beneficiary, and the current practise of the Hungarian tax authority must be changed.

By Eszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

Firm's website.

Our Latest Issue