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The deductibility of the VAT content of incoming invoices has long been a source of consternation both for equity investors and for the holding companies heading up corporate groups. In a relaxation of the general ban on VAT deduction in these cases, the European Court of Justice (“ECJ”) has given ‘active’ holding companies a way around the restrictions. Meanwhile, other recent judgments by the Court have further expanded the opportunities for VAT deduction. Nevertheless, the ECJ’s decisions also show that it’s better to err on the side of caution.

On 29 May 2019 the EU Commission published a guidance on the interaction between the Regulation on the free flow of non-personal data (FFD Regulation) and the General Data Protection Regulation (GDPR). In particular, private businesses, notably small and medium-sized enterprises and other entities which process data in the course of their professional activities, will benefit from the guidance.

The personal income tax exemption for mothers with four or more children will come into effect as of January 2020. In connection with the seven-step family protection action plan starting on 1 July 2019, this is another significant benefit for mothers. The tax exemption does not affect the family tax advantage, which can still be claimed by both parents.

The Member States of the European Union shall bring into force the laws, regulations and administrative provisions necessary to comply with the EU Directive 2017/828 which establishes requirements in relation to the exercise of certain shareholder rights attached to voting shares in general meetings of companies by 10 June 2019. The most sensitive part of the directive is that it makes the remunerations of the directors public.

According to a recent amendment to the Hungarian Act on Sport in March 2019, an international sport association – recognized by the International Olympic Committee – will be classified and regulated as a subtype of sport associations in Hungary.

The Hungarian Public Procurement Act was modified as of 18 April 2019, in order to comply with the provisions of the Directive 2014/55/EU of the European Parliament and of the Council of on electronic invoicing in public procurement.

The European Court of Justice (ECJ) has declared in a recent case that when checking VAT transactions, the tax authority cannot ignore examining the full budgetary impact. Thus it is not acceptable for the authorities to deny the right of VAT deduction to a taxpayer without allowing the other taxpayer to accordingly reclaim the VAT that it paid. Furthermore, the court also found it unacceptable for the tax authority to base a fine only on the amount of the VAT deducted unlawfully without examining the tax shortfall actually caused. The ruling can be considered as another important step towards the creation of a fair VAT system.

On 1 April 2019 the Hungarian Parliament adopted a new act on the amendments necessary for the implementation of the European Union’s data protection reform (“Data Protection Reform Act”). The new act has a comprehensive nature, as it aims to finalise the implantation of the data protection reform in the affected (more than 80) sectoral laws.

In March 2019 the Hungarian Parliament voted to introduce a new form of asset management foundation, which will serve as a real alternative to the fiduciary asset management (trust) system (“bizalmi vagyonkezelés” in Hungarian).