The deadline for reclaiming VAT paid abroad is approaching

As the summer fades away and travels come to an end, 30th of September is approaching,
which is the deadline of the date until the VAT paid abroad can be reclaimed by submitting an request for a refund.
To help make the process smoother, we have summarized the most important details and practical information below.

When is it possible to reclaim VAT paid abroad?

In the cases where Hungarian companies purchase goods and services from other EU Member States, the transactions are subject to value added tax (hereinafter: VAT).

The condition for the refund is that the taxpayer can also deduct VAT in Hungary (e.g. taxpayer does not have a tax-exempt status, etc.) and would like to reclaim the input VAT incurred for the purposes of the Company’s activities. Furthermore, the Company must not have a permanent establishment or a fixed establishment in the EU Member State where the refund is claimed, through which it would derive income, as it must be declared in the VAT returns of that Member State.

Refund request - ELEKÁFA form

The request for a refund can be still submitted by the ELEKÁFA form of the Hungarian Tax Authority's General Form Filler (in Hungarian: ÁNYK). The deadline for the submission is 30th September of the year following the year in question, which deadline is time-bar and the Hungarian Tax Authority will not accept any request for certification regarding the default of the deadline. The previous strict practice appears to be changing following the European Court of Justice ruling, see our newsletter on the subject here.

Mistakes to avoid

Make sure that you use the latest version of the ELEKÁFA form before submitting, as your application may be rejected if the framework is not updated before submission.

We would also like to highlight that, under the relevant provisions of the VAT Act, the date of performance of the invoice is the relevant date for determining the claim period, not the date of invoice issuance. An invoice that was issued in January 2024, but with a performance date of December 2023, must be taken into account in the refund application to be submitted by 30th of September.

However, the process of the reclaim of the VAT paid abroad can be a simple process, but also can contain many administrative pitfalls, so in some cases - especially where the amount involved is significant - it is advisable to involve an expert. VGD Hungary's experienced tax advisors are ready to assist you during the process of the reclaim of the VAT paid abroad!

28 August, 2024

This newsletter provides general information and does not constitute advice.