1. Introduction of eVAT in Hungary
The eVAT system is introduced in Hungary: launched in 2024, the electronic VAT system (eVAT) is a service package based on data available at the tax authority to help you file your VAT returns. For tax periods beginning on or after 1 January 2024, VAT returns can be filed in one of the following three ways:
- eVAT through machine-to-machine connection (M2M);
- via the electronic interface provided by the tax authority (eVAT web interface);
- by filing the form under the Act on the Rules of Taxation (ÁNYK)
You can read more about the details of the eVAT system in our previous blog posts, including what companies need to do before implementing the eVAT system.
2. CESOP - Data reporting obligation of payment service providers
As of 1 January 2024, a new data reporting obligation has been introduced for payment service providers (CESOP).
Under this regulation, payment service providers must provide the tax authority with quarterly data on certain cross-border payment transactions by the end of the month following the current quarter.
RSM VAT calculator 2024 – Calculate the amount of VAT based on the net or gross invoice value
3. VAT changes in the construction industry in 2024: changes in the domestic reverse charge mechanism
The domestic reverse charge VAT rule for construction will be slightly modified. From 2024, the domestic reverse charge will apply to activities concerning real property if the activity is subject to an official authorisation or notification to an authority.
The activity relating to real property includes construction, installation and other assembly work for the creation, expansion, remodeling or other alteration of real property (including the demolition of real property and changes of use).
The fact that the activity related to the real property is subject to an official permit/notification is normally declared by the general contractor to the subcontractor(s),who in turn declare it down the chain to their subcontractor(s) (the so-called “downward declaration"). However, if the permit or notification to the authority relates to an activity carried out by the subcontractor on the real property, from 2024 it is the subcontractor’s responsibility to make the declaration to the general contractor (“upwards declaration").
From 2024, domestic reverse charge applies to construction and other similar works, which are treated as services supplied for the purpose of building, expansion, remodeling and any other form of alteration of a property, including where a property is terminated by demolition and its function is changed (hereinafter together: activities related to real property),provided that the construction, expansion, remodeling and any other form of alteration of the property is subject to authorization by, or notification to, the competent building authority, of which the customer shall provide a statement in advance and in writing to the supplier of the service. Where the authorisation or notification to the public authority relates to the activity relating to real property carried out by the service provider, the latter is responsible for making a declaration to the taxable person receiving the service.
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4. DRS and VAT – VAT on the mandatory deposit refund
On 1 January 2024, the new return system for beverage packaging, the so-called mandatory deposit refund scheme (DRS),entered into force in Hungary. In connection with this, the VAT regulation was also amended with effect from 1 January 2024. Under the special rules that entered into force on 1 January 2024, the taxable amount does not include the mandatory refund for a non-reusable product that was placed on the market as such (i.e. ‘return fee’ within the meaning of the VAT Act).
The mandatory deposit refund scheme (DRS) and its VAT implications have been covered in a separate blog post.
5. E-receipt and e-cash register
The new e-cash register system allows businesses to use a software-based or even cloud-based system for giving receipts.
This means that the e-receipt is produced electronically and customers can access it via the application provided by the tax authority. Paper based copies are only issued if requested by the customer
The data content of the e-receipt is wider than that of the currently used receipt. As with invoices, an adjustment receipt can also be issued.
We wrote more about the introduction of the e-receipt in our blog post on the 2023 autumn tax package, summarising the 2024 tax changes.
5+1. Changing VAT rates in 2024
As of 1 January 2024, the VAT rate on some products have also changed, including the VAT rate on dessert cheese (commonly known as “túró rudi”) dropping to 5%.
