The transaction costs of these enterprises can be reduced significantly if they commission an indirect customs representative with Authorized Economic Operator (AEO) qualification during the customs clearance procedure.
We see that in today’s market environment any solution allowing companies to operate more efficiently deserves a key role. Indirect customs representatives with AEO qualification are able to provide a comprehensive logistic and VAT financing solution for the tax-exempt product imports of their clients. However, they assume joint and several liability for the proper fulfilment of tax obligations. This joint and several liability is a risk the correct treatment of which is the basis of professional customs representation. For this reason, the contractual basis of the representation relationships and the careful planning of the procedures relating to customer identification, risk assessment and customs clearance are essential for reducing the representative’s risk to a minimum. The companies performing tax-exempt product imports commissioning a customs representative should also get familiar with the conditions of tax exemption as the fulfilment of these is their responsibility also.
During tax-exempt product imports, the commissioning of an indirect customs representative with AEO qualification brings substantial financing benefits: by commissioning an indirect customs representative with AEO qualification in relation to its tax-exempt imports, a taxable person registered in Hungary is released from the obligation of providing tax collateral.
Foreign enterprises are also released from the obligation of registering and filing tax returns in Hungary provided they do not pursue other taxable activities in Hungary. The commissioning of an indirect customs representative with AEO qualification during tax-exempt product imports reduces the costs and the administrative burdens of importing in Hungary to a minimum in the case of foreign taxable persons.
Tax-exempt product imports of Hungarian taxable persons in the case of commissioning a customs representative
Direct customs representative | Indirect customs representative with AEO qualification | |
Import VAT base | HUF 100 000 | HUF 100 000 |
Tax collateral | HUF 27 000 | None |
Tax-exempt product imports of foreign taxable persons in the case of commissioning a customs representative
Direct customs representative | Indirect customs representative with AEO qualification | ||
| Import VAT base | HUF 100 000 | HUF 100 000 | |
| Tax collateral | HUF 27 000 | None | |
| Other obligations | Hungarian tax registration | Yes | No |
| Tax return filing | Yes | No | |
A tax advisor can support the work of an indirect customs representative with AEO qualification substantially. As tax advisors, we can assist the companies commissioning such representatives so that they not only take advantage of cost reduction opportunities during their tax-exempt imports but also enjoy the safety offered by risk management processes.
