Value-added tax, tax procedure rules

VAT-grouping rules

The rules on VAT groupings have been clarified with regard to the submission of self-assessment returns after the termination of a VAT grouping, but still for the period of group tax liability. In this sense, even after the termination of the VAT grouping, the appointed representative of the VAT grouping may make valid legal statements as regards the VAT liability of the terminated VAT grouping.

VAT base reduction on refunds to final consumers

The changes to the VAT Act, in line with the CJEU judgment in case C-717/19 (Boehringer Ingelheim), offer a solution for sales arrangements where the taxable person making the supply has no direct link to the final consumer in the supply chain. Between him and the final consumer are resellers to whom the taxable person making the supply actually sells the goods or services. For this reason, the vendor cannot provide the final customer with a cash discount other than by using a third party to whom it transfers the discount to be passed on to the final customer.

The current provisions of the VAT Act do not allow the taxable amount of the supplier taxable person to be reduced by the value of this type of cash refund. The tax law change creates the legal basis for this and sets out the procedural and substantive conditions.

Clarification of tax procedure rules on the VAT base reduction for refunds

The change in the tax procedure rules follows the change in the VAT Act related to the above cash refunds. The starting date for entitlement to late fee on refund claims is the same as the starting date for entitlement to a VAT base reduction.

20 July, 2022

* * *

Should you have any questions regarding this newsletter,
the tax experts of VGD Hungary will be pleased to assist you.

This newsletter provides general information and does not constitute tax advice