THE EXTENSION OF REVERSE TAXATION

6/Jun/2012

THE EXTENSION OF REVERSE TAXATION

The reverse taxation concerns the procurement of the following products:

maize, wheat and meslin, barley, rye, oats, triticale, sunflower seed kernels, whether or not broken, rape or rape oil seed, whether or not broken, soya beans, whether or not broken.

As a result of the legislative modification, the taxpayer purchaser of the above listed products shall be required to pay the tax on every transaction in the sales chain. As a consequence of the changes outlined above, the VAT taxpayer shall also have an obligation to make a declaration. The taxpayer may fulfil this obligation in the VAT declaration filed in relation to the given tax period. The obligation to make a declaration in relation to the purchase of the above listed products includes the following data:

the customer’s taxation number; the date of fulfilment of sale of product; the quantity (in kilograms) of the product sold (broke down to custom tariffs); and the calculated tax base rounded to the nearest HUF 1000.

The new legislation will enter into force on 1st July 2012, and remain applicable for the taxation period extending until 30th June 2014. Its provisions are first applicable to the transactions fulfilled on or after 1st July 2012, except for those transactions where:

the purchasing taxpayer would be required to self-assess the payable tax before 1st July 2012 according to rules relating to the self-assessment of payable tax in the framework of reverse taxation (Art. 60 (1)-(3) of the VAT Act; e. g. if the payment of the consideration precedes the fulfilment of the transaction and falls on a date before 1st July 2012); or

an advance payment is paid before 1st July 2012 (in this case the taxable person fulfilling the transaction in his own name is required to pay tax on the advance payment according to Art. 59 (1)-(2), while the purchaser of the product is required to pay tax on the part of the tax base decreased by the net amount of the advance payment)

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The foregoing summary is intended to raise awareness and does not constitute legal advice.

If you have any questions or need further information, please do not hesitate to contact us.

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