Hungary: The grace period has ended and the tax office can sanction those who do not comply with the reporting obligation
Despite the objections of multiple professional organizations and despite many legal interpretation issues still open, the new EKAER system aimed to reduce VAT fraud and introduced on 1st January 2015 went live as of 1st March following multiple delays. The legislator has significantly modified the rules that previously entered into force on the last day preceding the expiry of the grace period and provided taxable persons with a significant challenge. The new regulation contains many advantageous rules and in some cases the person subject to the reporting obligation has been changed. The most important advantage is the extension of exemptions from EKAER. Thus for example certain goods transported during waste transportation, goods subject to a metal trading license, certain medicines and goods sent by post enjoy exemption from the reporting obligation irrespective of their weight and value. In the case of goods which have already been subject to EKAER, minimum thresholds for reporting obligation have been increased. The following are exempt: for non-hazardous goods, goods not exceeding 2000 kg and HUF 5 million net, and for hazardous goods, goods not exceeding 500 kg and HUF 1 million net. (Following the previous ambiguity, the legislator has clarified that both the weight and value thresholds are to be met simultaneously.) Enterprises that fulfill other taxation criteria can report with simplified data content as of 1stApril and can also claim so called track exemption for transport not exceeding 20 km. A modification regarding subjects of reporting is that in the case of a domestic “chain supply”, the supply subject to reporting will be not the first taxable supply but the supply affected by actual transportation. As of 1st April, the recipient (buyer) will be subject to the reporting obligation in the case of first taxable domestic supplies if the goods are transported by the recipient (buyer) or by its proxy. The list of hazardous goods is expected be amended soon with electricity and other items.