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The highest, 27 percent VAT rate of the EU represents a major competitive disadvantage for the Hungarian enterprises selling products to foreign private persons. These companies should consider whether they can take advantage of the benefits of distant sales, namely competitive sales prices, a simple, transparent and effective sales process, low VAT and low corporate income tax. With our tax and accounting consulting service concerning distant sales we assist clients in the selection of the right forms of taxation and in the comprehensive fulfilment of bookkeeping tasks.
We recommend our tax and accounting consulting concerning distant sales to enterprises selling products to foreign private persons with delivery of the ordered products from Hungary (or other member state different from the member state of the delivery address) to the buyer. Such transactions are typical of enterprises engaged in online sales or the operators of web-shops.
Distant sales always qualify as VAT transactions and the VAT rate applicable is tied to a certain limit value in each member state. However, EU regulation as well as the EU-aligned Hungarian VAT regulation allows companies to choose before reaching the relevant limit value whether they wish to apply the VAT rate of the member state of dispatch of the products or that of the member state in which the delivery address is located.
The foreign tax liabilities relating to distant sales are restricted to VAT. Practically, companies only have to file VAT returns abroad and pay VAT. The seller does not incur corporate income tax abroad with regard to the distant sales whether he chooses to apply the foreign VAT rate or if he is obliged to apply the foreign VAT rate due to exceeding the relevant value limit.
Our tax consultant employees have several years of experience in the fast and efficient fulfilment of tasks relating to applications for foreign tax numbers and the preparation and filing of foreign tax returns as well as the answering of questions relating to invoicing or finding the most efficient, customized solution for specific clients.
Our accounting division has also been supporting Hungarian enterprises having foreign tax numbers in the planning and fulfilment of bookkeeping and accounting tasks for years. In our comprehensive bookkeeping service we continuously monitor the value of foreign supplies and, if requested, we also plan and perform foreign invoicing tasks.
Our products provide assistance in tax planning for enterprises. Do not hesitate to contact our professionals with your questions.
Our tax team covers the latest taxation modifications and legal interpretations published by the tax authority for our clients in a newsletter. Timely information on legislative modifications significantly contributes to financial plans and effective tax optimization.
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