European Court of Justice has decided: Hungarian VAT regulations contrary to EU law 10 August 2011
The input VAT on unpaid purchases (if certain other conditions are met) may be reclaimed no earlier than in the VAT period in which the company settled the corresponding purchase invoices. In practice this could limit the right of companies to reclaim VAT - even permanently. The European Court of Justice stated in its judgement of 28 July 2011 that Hungary's VAT regulations are incompatible with EU law.
As a result of the judgement, the related rules of law are likely to be amended soon, which will almost certainly assure, through a new system of rules or through stricter VAT inspections, that VAT reclaims can be appropriately checked.
For further information contact tax director Mr Tamas Gyanyi at HLB member firm HLB Klient Kft.
Mr. Tamas Gyanyi
ABOUT HLB KLIENT KFT
The first company in the HLB Klient group was established in 1998, with the aim of offering tax consulting, auditing, legal counselling and other financial administration services in compliance with both international and Hungarian standards. At present, the group consists of four companies and provides complex advisory and compliance services to its clients. The services we offer range from auditing and tax consulting, through bookkeeping, payroll services, legal services related to company establishment and labour-law issues, and other financial management services. Since January 2003 HLB Klient Kft has been the Hungarian representative of HLB International enabling HLB Klient to provide clients with professional services at an international level.