Following the restrictions in the Far East, all companies operating online marketplaces in Hungary can expect significant tax changes and a new tax burden from January 2025.
The change may also affect the very competitive prices that have been the main reason for the popularity of the big platforms and their competitive advantage over domestic retail. One of the most significant provisions of the autumn tax package is the one that would extend the special retail tax to so-called platform operators. The tax liability would fall on the foreign or domestic operator of the online marketplace for sales made by retailers through the platform. Platform operators are defined as web shops or applications that mediate sales between professional sellers and their customers. Examples include Temu, Wish or, for example, Amazon.
Even though these sites generate a turnover that would be subject to the higher retail tax rates, since they do not sell their goods themselves or not all of them, but act as intermediaries between smaller traders and their customers, they have not been subject to retail tax, as it is determined by the turnover of the seller. In other words, if Temu bought from a company with a turnover of less than HUF 500 million, the seller did not have to pay retail tax at all. Under the new rules, however, it is the turnover of the platform operator, such as Temu, that must be taken into account when retail tax is paid. In other words, they will also have to pay retail tax in Hungary if the goods they order are delivered to Hungary, and the calculation of retail tax will be based on the platform operator's total annual turnover in Hungary, which could result in a substantial tax liability due to the very steeply increasing banded tax system.
Finally, the platform operators must register as taxpayer persons with the tax authorities within 15 days. According to data from July 2024, more than 100 platform operators have registered in Hungary. Iti is advised for the online marketplace operators to pay close attention to this, as from January 2025 the tax authority will have severe sanction towards those platform operators who fail to register and pay the retail tax: the tax authority can its website inaccessible.
By Rozsa Rusvai-Darazs, Attorney at law, KCG Partners Law Firm
