EU to review Hungarian VAT questions on zero rated exports
The European Court of Justice (ECJ), the highest court of appeal on EU legal and tax affairs, is to review a number of zero-rated VAT export issues raised by the Hungarian VAT authorities.
In particular, the Hungarians are seeking for clarification of the time limit after an agreed sale for the export of goods outside of the EU (from Hungary) in order to qualify for zero-rated VAT. It is also looking for guidance on when it may alter the rules of the EU VAT Directive in the interest of preventing potential VAT fraud or under collections.
This is a key issue for the EU VAT compliance system which faces multi-billions of VAT fraud where businesses purport to export goods to gain a zero VAT rate, but actually sell the products domestically – which would trigger a standard VAT rate charge.
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