Import ban on Ukrainian products and new EKAER rules!
On April 18th, 2023, the Government of Hungary issued its decree regarding the transport of certain animal and agricultural products from Ukraine which are intended for the Hungarian market. (Government Decree 130/2023. (IV. 18.)).
The Government Decree introduced an import ban on certain products originating in war-torn Ukraine, animal products, and agricultural products listed in the Annex to the Decree (so-called "sensitive products"). Prohibition does not apply to transit movements, e.g. imports into Hungary with consecutive sales to the EU, but new EKAER rules (e.g. notification and guarantee) apply to intra-Community acquisitions and purchases for other purposes of the referred products below.
Sensitive products include cereals, meat from certain farm animals, eggs, honey, flour, sugar, vegetables, oilseeds, bread and bakery products, and wine from grapes.
It is important to note that grits made from oil seeds (e.g. sunflower grits, rapeseed grits) are not sensitive products.
In the event that the supplier of a sensitive product is checked by the authorities, the supplier is obliged to prove that it does not come from Ukraine - and the declaration of the contractual partner is not sufficient for the verification, therefore it is also recommended to obtain a certificate of origin.
The regulation makes an exception to the ban for transit carriers - i.e., sensitive products from Ukraine can be transported through Hungary, but this activity is subject to strict conditions, the compliance of which is the responsibility of the transit carrier:
- the sensitive product imported from Ukraine must leave Hungary by the 7th day from the date of importation;
- the means of transport is provided with an official lock by the Hungarian Tax Authority (HTA) - during transit, the shipment cannot be removed from the means of transport even in the smallest quantity;
- at the same time, the most important data of the shipment, the carrier and the means of transport, as well as the planned schedule, and route of the shipment, are registered.
Obligation to apply for an EKAER number
It is important that the scope of requesting an EKAER number has also been expanded to include the following product: wheat and doubled; rye; barley; corn; rapeseed or rapeseed (also broken); and sunflower seeds (also broken). The recipient of the goods subject to VAT is obliged to report the goods acquired within the Community or purchased for other purposes. This means that no matter which EU member state the product comes from, it is mandatory to request an EKAER number for all imports into Hungary, in addition, reliable taxpayers are also subject to a guarantee obligation in this respect.
The Regulation is effective from April 19, 2023, and will expire on July 1, 2023. Its compliance is checked by the police and the Hungarian Tax Authority, and in case of violation, an administrative fine is imposed, which can amount up to 100% of the net value of the sensitive product.
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This newsletter provides general information and does not constitute tax advice.