Hungary to update VAT rules following EU ruling
The Hungarian government has confirmed that it will amend its VAT laws to comply with a European Commission ruling.
Currently, Hungarian VAT registered payers may reclaim excess VAT paid – VAT credits – by either carrying it forward to future periods to offset against any liabilities, or by seeking an immediate refund. However, any credit cannot be paid where it includes an element of costs, or input VAT, that has not yet been paid for in cash terms. This would often mean that credits would always have to be carried forward. This is in conflict with the EU VAT Directive.
The National Economic Ministry has now confirmed that it will amend this rule, and repeal the current rules. This will bring it into line with the EC’s March 2010 ruling.